Half of investors admit to making impulsive investment decisions and then regretting it
- After reacting impulsively, 67 per cent of investors have regretted it
- One in three make impulsive investment decisions when feeling excited
- Social media (32 per cent), friends (31 per cent) and fear of missing out, or FOMO (30 per cent), are the most common factors influencing an impulsive decision
30th November 2021: New research from Barclays Smart Investor reveals that half of British investors (50 per cent) have admitted to making an impulsive investment decision, with two thirds (67 per cent) going on to regret it. When asked what influenced their investment decisions, social media topped the list, with a third (32 per cent) of investors citing it as a factor, closely followed by friends (31 per cent) and the fear of missing out (30 per cent).
The research showed that separating emotions from investments is hard no matter what it is investors are feeling. A third (34 per cent) of them have made an impulsive investment decision whilst excited, a fifth (21 per cent) when feeling impatient and 16 per cent made a decision in fear.
More broadly, just shy of half (47 per cent) of investors have admitted they often feel anxious about their investments and two thirds often feel excited when checking on their investments. Anxiety and excitement can also lead to other bad investment habits, with 62 per cent feeling the need to constantly monitor their investments to succeed, meaning they could be prone to react to short-term fluctuations in the market.
Rob Smith, Head of Behavioural Finance at Barclays Wealth & Investments said, “Feeling an emotional connection to your investments doesn’t always have to be a bad thing, especially if you use it as a tool to invest in funds you feel passionate about. However, when your feelings start to cloud your decision making, it’s time to take a step back. By understanding your emotions, it’s easier to manage them and create a diversified portfolio that can not only take advantage of market opportunities but also weather any storms.
“It’s understandable that many investors enjoy the thrill and excitement of investing. One compromise investors can make is the ‘core-satellite approach.’ Investors may want to put their money into something stable and less exciting, and then add a small, satellite component of investments that gives them more enjoyment, keeps them engaged and gives them an emotional reward – but without causing investors to make any decisions they may regret.”
Notes to editors:
All data, unless otherwise specified is taken from 2,000 respondents of a representative sample size conducted by Censuswide in September 2021 – all respondents were 18+ and had previously invested money.
Censuswide abide by and employ members of the Market Research Society which is based on the ESOMAR principles.
For more information on Smart Investor visit www.barclays.co.uk/smart-investor
Barclays is a British universal bank. We are diversified by business, by different types of customer and client, and geography. Our businesses include consumer banking and payments operations around the world, as well as a top-tier, full service, global corporate and investment bank, all of which are supported by our service company which provides technology, operations and functional services across the Group.