Stop Letting Emotions CONTROL Your Investments

The panel explains why position sizing can help investors think more systematically about risk instead of reacting emotionally to dollar gains and losses. The argument: understand why you own an investment, determine its appropriate portfolio weight and maintain discipline over time. Asset allocation is commonly expressed as percentages of an overall portfolio, while diversification can help manage concentration risk. FINRA also advises investors to avoid impulsive decisions during volatile markets and stay focused on their longer-term objectives.
Liquidity becomes especially important when portfolios include alternative investments. FINRA warns that some alternatives can be difficult to sell quickly, meaning investors may be unable to access their money when needed or may have to accept a significant loss to exit.
The clip argues that wealthier investors can potentially dedicate more capital to illiquid assets because they may need a smaller percentage of their portfolio readily available. But portfolio size alone doesn’t determine the appropriate allocation; goals, obligations and risk tolerance also matter.