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Fear of loss can lead to bad decisions
Investing
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Like every other investor, you prefer not to see the value of your investments drop. But at some point they will fall simply because of the ups and downs of the market. And how you respond to short-term losses can help determine if you enjoy long-term investment success.
Investors’ feelings about losses can be complex. In the field of economics, an area of study is devoted to “loss aversion” – the concept that people dislike losing money so much that, given a choice, they’d prefer to avoid losses rather than take gains. For example, if you have a high degree of loss aversion, then you will find greater dissatisfaction by losing $100 than you’d get satisfaction from taking a $100 profit.
Loss aversion can lead to various forms of negative investment behavior. Here are two of the most common results:
- Seeking “risk-free” investments. When you think of investment losses, the first thing that probably comes to mind is a drop in stock prices. If you’re really loss-averse, you might seek to avoid this situation by simply avoiding stocks and placing all your money in other investments. While some of these investments may seem “risk free,” you must consider factors such as inflation risk – the possibility that these investments may provide returns that don’t keep up with the rate of inflation.
- Holding “losers” too long. From time to time, you will own investments that, for whatever reason, underperform. If you’re highly loss-averse, though, you may have a tough time acknowledging the losing nature of these investments, so you may be tempted to hold on to them until they “bounce back.” But if the investment’s fundamentals change, or if the investment no longer aligns with your goals, it may be time to sell it and look for other opportunities. Conversely, you may want to hold on to quality investments whose price has dropped in the short term, because these investments may well recover.
How can you avoid these types of behavior? For starters, you’ll need to recognize the symptoms of loss aversion in yourself – and then resolve to overcome them. Accept the fact that short-term losses are part of investing and that every single investment carries some type of risk.
This doesn’t mean, of course, that you should do nothing to reduce your risk. One effective risk-fighting measure you can take is to diversify your holdings by investing in a variety of stocks, bonds, government securities, CDs and other investment vehicles. If you had all your holdings in only stocks or bonds, a downturn primarily affecting one of those assets could lead to a big hit for your portfolio. But by spreading your dollars among a variety of investments, you’re also spreading the risk.
By not overreacting to these losses, and by diversifying your portfolio in a way that best meets your individual needs, you can look past today’s losses toward tomorrow’s possibilities.

This article was written by Edward Jones for use by Edward Jones financial advisor Evans of Richmond Hill.

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Record April boosts Savannah's container trade at port
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The Port of Savannah moved 356,700 20-foot equivalent container units in April, an increase of 7.1 percent. - photo by Provided

The Georgia Ports Authority's busiest April ever pushed its fiscal year-to-date totals to more than 3.4 million 20-foot equivalent container units (TEUs), an increase of 8.8 percent, or 280,000 TEUs, compared to the first 10 months of fiscal 2017.

"We're on track to move more than 300,000 TEUs in every month of the fiscal year, which will be a first for the authority," said GPA Executive Director Griff Lynch. "We're also anticipating this to be the first fiscal year for the Port of Savannah to handle more than 4 million TEUs."

April volumes reached 356,700 20-foot equivalent container units, up 7.1 percent or 23,700 units. As the fastest growing containerport in the nation, the Port of Savannah has achieved a compound annual growth rate of more than 5 percent a year over the past decade.

"As reported in the recent economic impact study by UGA's Terry College of Business, trade through Georgia's deepwater ports translates into jobs, higher incomes and greater productivity," said GPA Board Chairman Jimmy Allgood. "In every region of Georgia, employers rely on the ports of Savannah and Brunswick to help them become more competitive on the global stage."

To strengthen the Port of Savannah's ability to support the state's future economic growth, the GPA Board approved $66 million in terminal upgrades, including $24 million for the purchase of 10 additional rubber-tired gantry cranes.  

"The authority is committed to building additional capacity ahead of demand to ensure the Port of Savannah remains a trusted link in the supply chain serving Georgia and the Southeast," Lynch said.

The crane purchase will bring the fleet at Garden City Terminal to 156 RTGs. The new cranes will support three new container rows, which the board approved in March. The additional container rows will increase annual capacity at the Port of Savannah by 150,000 TEUs.

The RTGs will work over stacks that are five containers high and six deep, with a truck lane running alongside the stacks. Capable of running on electricity, the cranes will have a lift capacity of 50 metric tons.

The cranes will arrive in two batches of five in the first and second quarters of calendar year 2019.

 Also at Monday's meeting, the GPA Board elected its officers, with Jimmy Allgood as chairman, Will McKnight taking the position of vice chairman and Joel Wooten elected as the next secretary/treasurer.

For more information, visit gaports.com, or contact GPA Senior Director of Corporate Communications Robert Morris at (912) 964-3855 or rmorris@gaports.com.

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