Investors must ‘take emotion out’ of decisions amid Covid

Investing should involve looking long-term and retaining value

Investors looking to the markets during the coronavirus pandemic should keep emotions out of their decisions, according to one of the north-east’s top money experts.

Steven McKnight, principal partner of Aberdeen-based McKnight Associates Wealth Management, said investing during the crisis should involve focusing on “buying low” and retaining the assets they already have with a longterm investment approach, rather than focusing on daily valuations.

Mr McKnight was speaking at the

Press and Journal and The Courier’s second virtual business breakfast yesterday morning, in association with McKnight Associates, principal partner practice at St James’s Place Wealth Management.

He was joined by fellow speakers Darren Johnson, head of engagement, investment consultancy at St James’s Place Wealth Management and Alan Lees, Scotland director for BT Enterprise.

Covid-19 has affected many aspects of people’s lives, including savings.

Volatile stock markets and an uncertain pension landscape have left investors wondering how to protect their savings and get their finances on track.

Mr McKnight is well-qualified to lend a helping hand. He has more than 25 years’ experience in financial services and heads up the team, which includes three more advisers, at McKnight Associates.

He said: “The psychology of investing depends on two things, the valuation you look at and the valuation you last saw.

“When you first invest you have excitement and thrill. If the valuation is higher than the previous one you saw you feel optimistic and great and probably at that point you want to invest more. But that’s the period of maximum risk. If the valuation is lower, you feel panic, a bit of desperation and ultimately you don’t feel like a successful investor.

“You probably wonder why you invested in the first place and feel desperation and panic. But at the point you feel that it is the point of maximum financial opportunity and our industry is quite unique at that.

“So the psychology of investment, whereby a successful investor really takes emotion out of it and doesn’t look at the valuation of their investments on a daily basis, are effectively able to turn off their emotions and look at buying low and retaining assets that they have.”

The psychology of investing depends on two things, the valuation you look at and the valuation you last saw. STEVEN MCKNIGHT