woman looking at stock on her phone

One of the hardest truths about investing is that our biggest challenge is often combating our own emotions. We tend to get overly nervous when markets fall and too giddy when things are going great, which can push us to make emotional decisions about whether to buy or sell.

Emotions are not helpful when it comes to your money. For example, in March 2025, a survey from the Federal Reserve Bank of New York reported that just 34% of people expected the stock market to be higher one year later. That pessimism likely existed because stocks had recently fallen by more than 10%. And yet, as I write this, the S&P 500 is up more than 14% for the past 12 months. If you sold stocks a year ago because emotions got the best of you—or you stopped investing more—you likely missed out on a strong comeback.

This is where a long-term investing plan is so important. Here is how to approach it:

  • Decide how much to invest in stocks. If you already have enough to live comfortably on your savings, Social Security, and other income, you technically don’t need to invest in stocks. However, most of you need some stocks because they offer the best chance of earning inflation-beating gains. That might be 50% of your overall investments, or 40%, or 60%, or more.  It’s your decision based on your current needs. The amount you had invested in stocks when you were 30 may not be the right amount when you are 55 or 65.
  • Don’t ever rely on the stock market for current living expenses. If you are near or in retirement, you must keep at least two to three years of living expenses in cash—in addition to your emergency savings. That will allow you to pay your bills even when the stock market is down, and you don’t have to think about whether you should sell stocks.
  • Diversity is always the way to go. At a minimum, keep 50% of your stock portfolio in a low-cost index fund or ETF. That’s your foundation, which is invested across hundreds of stocks. And honestly, it is perfectly fine to keep 100% in index funds. There is no reason you must ever own individual stocks. It’s a choice. But if you do decide to own individual stocks, diversification is still mandatory: no single stock should ever be more than 5% of your overall stock portfolio.
  • Focus on the long-term. Money you need in the next five to seven years does not belong in stocks. History shows that when we are patient—five, seven, or ten years—the market tends to recover from down periods, and builds wealth. Will stocks go down at some point within a five or ten-year period? Of course! But if you remain focused on the long-term, you will be positioned to reap the benefit of the fact that over time (years, not months) diversified stock index and ETF funds will likely rise.
  • Use Dollar-Cost Averaging. If you have a lump sum to invest and are worried about the timing, consider methodically investing over time. This is called dollar-cost-averaging. For example, if you have $5,000 to invest, you might invest $1,000 a month for the next five months, rather than stress about if and when to put the entire $5,000 into the market. And if you have automatic contributions made to a workplace retirement plan, or to your own IRA, then you are already dollar-cost-averaging. That’s a great way to keep emotion out of your investing.
  • Listen to my Women & Money podcast.  I often share my insights on what is happening in the markets, and am always focused on how to remove emotions from the investing equation and help my listeners build long-term security.  My Women & Money podcast is absolutely free.

Share with a friend

Share this Article

Get Suze’s financial advice delivered straight to your inbox

    Top Resources for You

    Related Articles

    Categories: Investing, Stocks/Bonds/ETFs