Surging stock prices and improving job prospects have set Americans off on a spending splurge that is cutting into how much they sock away for retirement and rainy days.
Financial professionals generally take market swings in stride, so how can their clients protect themselves from their own emotional reactions?
My way to help people avoid emotions and think clearly about the situation is to ask, 'If you had the money in cash right now, would you buy that stock?' By framing it that way, people let go of what they previously bought the stock at and realize that there may be a better use of that money.