The No. 1 Investing Mistake to Avoid As Washington Grinds to a Halt

Emotional Impact on Investing - Emotional aspects play a significant role in investment decisions, with fear and greed being powerful motivators that can lead to irrational actions [3][7] - Behavioral finance literature highlights the importance of understanding emotions to avoid making detrimental short-term decisions that affect long-term financial health [3][4] Market Reactions to Events - During the COVID-19 pandemic, investors overestimated the long-term demand for COVID-19 related products, leading to inflated stock prices for companies like Pfizer, which later saw a decline as market dynamics normalized [5] - Similarly, the surge in online shopping during the pandemic led to increased valuations for delivery companies like United Parcel Service (UPS), which subsequently fell as consumer behavior returned to pre-pandemic norms [6]