Feeling ‘scared and emotional’ about investing?  You’re not alone – how to get a grip before you tank your finances

Dramatic swings in the stock market are hard on retail investors, generating strong emotions that override conventional investing wisdom, such as, "Buy low, sell high."

According to a June MarketWise survey of 1,002 retail investors, 25% of participants sold an investment during the most recent market drop, only for the market to recover within weeks.

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Emotional investing decisions can have a serious impact on the state of your finances. The 43% of surveyed retail investors who lost money in an emotional trading decision gave up an average of $1,606. However, many retail investors don't realize they're making emotional investing decisions in the first place.

Emotional investing behavior is hard to recognize

FOMO, the fear of missing out, is easy to identify when you come across a photo of your friends on Instagram having brunch without you. However, the survey shows FOMO is much harder to recognize in your investing decisions.

Per the MarketWise survey, 31% of investors say they trade emotionally, but only 20% labeled themselves as an emotional investor. Yet 48% of respondents say they made a FOMO-driven purchase within the last 12 months.

"You've got this divide between people who are clearly making emotional decisions, but they're thinking that they're not quote, unquote emotional investors," James Royal, MarketWise investing writer and author of the recent survey, told Moneywise. "That dichotomy is a real indicator of what a pejorative term, 'emotional investing' is."

In denial of their emotional investing, Royal says many retail investors open themselves up to making the same mistakes repeatedly. "They can't self-correct until they admit the possibility that they are making decisions on emotional grounds," he said.

Investing decisions as a result of FOMO are especially hard to notice, says CFP Derek Notman, because the decision can take place long after the initial emotion. A missed opportunity may spur retail investors to overcommit to the next opportunity too quickly. "So now they're like, 'Okay, I'm gonna hit it this time for sure,' but all due diligence goes out the window," Notman told Moneywise.