Now that the Dow Jones industrial average has hit 20,000, many investors are wondering what this means to them.
To that point, financial advisors expect to see clients exhibit some emotional biases when it comes to their investment decisions. They may experience the fear of missing out, greed and overconfidence.
"The Dow, or any index, hitting a certain mark is alone not a reason to take action," said Adam J. Reinert, a certified financial planner at Marshall Financial Group. "In doing so, investors will likely be exhibiting signs of some cognitive or emotional biases present in behavioral finance."
Reinert said it's very important for investors to remember that focusing on the long-term picture, rather than short-term approaches, often produces better results.