comments:
Sure, you take some solace in knowing that the vast vast majority of people who do react to market sentiments like fear by pulling out, or fomo, hype, exuberance by taking inappropriate or excess risk tend to significantly underperform, even professionals who do it for a living. We are emotional beings, our brains are hard wired for day to day survival with a series of shortcuts that are extremely effective at what they do, allowing us to be pretty efficient quick simple decision makers on average but leave us full of major flaws and biases not conducive to many complex modern problems, like investing. https://www.amazon.com/Thinking-Fast-Slow-Daniel-Kahneman/dp/0374533555 This is an incredible book on the topic Basically just know that if you do react to these fears you are almost guaranteed to shoot yourself in the foot. It's a losing bet. If you do know that in the past you've felt the same and did react by selling in a downturn out of fear, or find yourself feeling extreme stress it may also indicate you've misjudged your risk tolerance. Just don't fall into the trap of "staying invested" but reducing risk when fearful and increasing risk when markets look optimistic, this is no different than market timing. Don't forget; "The markets can stay irrational longer than you can stay solvent"
Do you know if she's read "Thinking, Fast and Slow" by Daniel Kahneman yet? It's a very accessible, fun, and foundational read for people interested in psychology, could get her a physical copy. You could also try browsing Cognitive Surplus and Uncommon Goods! I find Cognitive Surplus more focused on neuroscience/brain stuff and Uncommon Goods is a very mixed bag of nifty/interesting gifts.