Stock market investors are not immune to buyers' regret

Regret is one of the most powerful emotions an investor can face.

Whether it stems from taking a bold position too early or missing an opportunity entirely, feeling rueful often follows decisions made due to uncertainty.

Our survey of more than 4,400 high networth investors across Asia, Africa and the Middle East, conducted in partnership with business school INSEAD, reveals that investors tend to regret taking action more than not doing so.

According to our findings, 40% of investors who took action felt regret, compared to 35% who stayed on the sidelines.

Reasons for regret

So why does taking action trigger regret more than missing an opportunity entirely? Many investors find themselves disappointed for emotional and practical reasons. Insights into these trends reveal that one of the biggest regrets for investors is not having done enough research.

A recent study conducted by investment firm Columbia Threadneedle found that almost a quarter of investors who’ve made a financial mistake admit that failing to do their research is their biggest financial regret.

In addition, periods of heightened volatility since the start of the year – caused mainly by rising geopolitical tensions – has put investors on edge and could in turn lead to hasty decision-making. This could result in selling too soon and missing out on gains, or even incurring losses.

The CBOE Volatility Index (VIX), colloquially known as ‘Wall Street’s fear gauge’, surged 118% over a three-day period in April, revealing increased investor anxiety as markets experienced large swings and a variety of asset classes fluctuated wildly.

Furthermore, high fees, poor timing, or being locked into illiquid investments can also contribute to frustration and second guessing.

Regret can be valuable

While uncomfortable, regret can be valuable. It is one of many behavioural biases exhibited during an investment journey, and can come with important lessons. Staying calm and not succumbing to emotions following market swings is critical.

Having specific goals and a long-term mindset, rather trying to time the market, delivers more consistent returns, while diversification helps spread risk and limit the impact of any single setback.

Equally important is balancing risk and return, ensuring investments align with your goals and your risk tolerance. Meanwhile, in an increasingly unpredictable world, having protection in place whether through insurance, liquidity buffers, or robust wealth structures, can cushion the impact of unforeseen events.

These principles can help reduce financial risk and soften the emotional blow when things don’t go according to plan.

Professional advice also plays a critical role. Our survey found that investors deciding against financial advice were more likely to lose on their investments.

Of those that made losses, the number of investors that relied mostly on their own judgement was three times higher than those who sought professional guidance.

Recognising behavioural biases, such as regret, is a good start to any investing journey. Sharper thinking, improved resilience and better investment decisions can help manage and protect your wealth.