Many investors make the mis-take of selling investments in a panic. Most often, this means selling at a loss.
But there are ways to avoid ending up in this situation. The best is to design your investment portfolio so that, in the long run, it doesn’t matter whether some of your assets yo-yo in value here and there. By diversifying your portfolio among different asset classes, you can ensure that your losses in one type of investment are buoyed by stability—or even gains—in other types. Thus, you don’t lose sleep over a temporary decline in value, and you can resist the urge to sell in a panic.