I've been a financial planner for over 20 years and I still see investors make the same mistake when things aren't going well

• As a wealth manager for more than two decades, I've helped my clients through multiple financial crises.
• Time and again, I see investors make the same mistake: allowing their emotions to dictate their strategy.
• It's difficult to separate strong emotions from your money. But failing to do so can lead to regrettable decisions.
• My best advice is to remove the emotions and stick to your investment plan.

So far in my 20-plus years as a wealth manager, I've held clients' hands through three major stock-market crises.

The best piece of advice I can give about investing based on these experiences is to stick to your investment plan and keep your emotions out of your decision-making process.

Admittedly, this can be extremely difficult advice to follow. We're human, after all, and it's our nature to feel deep emotions.

However, strong emotions such as confidence, optimism, fear, and greed can cloud our objectivity and cause us to make regrettable decisions if we're not careful.

Leave your emotions out of it

I was working with a 30-year-old client in mid-March who had just received her largest annual bonus yet. The financial plan we had devised last year was for her to defer as much of the bonus as possible to max her Roth 401(k) plan, and then invest the remainder in her taxable account.

The client had already set aside a healthy cash reserve that would cover a year's worth of expenses plus remaining taxes on the bonus that the tax withholding didn't cover. And, she was confident that she wouldn't need to spend the bonus money until years into the future.

Despite all of this cushion, the bonus was paid during the time when we were all just beginning to shelter-in-place and COVID concerns were tanking the stock market.

The client wasn't worried about losing her job, but she had many friends who were getting laid off or furloughed, which caused her concern. She was deeply afraid about the future, and the deep declines in the stock market scared her even more. She was confident that there was no way the market could recover any time soon, and she wanted to keep the bonus money on the sidelines until a more favorable investment environment presented itself.

It's emotions like these that cause investors to buy at the top of the market and sell at the lowest point. My job was to try to protect her from these emotions during a period when no one knew what the short or long-term societal and economic outcomes would be.

Look at the data and stick to your plan

The client and I had a long conversation about how long-term investors should not try to time the bottom or the top of the market. Instead, it's important to look at longer-term market history and understand why staying invested over the long-term has always proven to be the right decision.

I shared with her that over the 30 years ending December 31, 2019, an investment in the S&P 500 would have achieved a 10% annualized return. Missing the 25 best single days during that period would have resulted in a 5% annualized return. And, skipping stocks entirely and investing only in Treasury bills over that time period would have resulted in a 2.7% compounded return.

Ultimately, the client decided to stick with her plan and she invested the bonus. Had she deviated from her plan she would have missed the most significant short-term market recovery from the market bottom in March.

Sandi Bragar is a certified financial planner and partner and managing director in planning strategy and research at Aspiriant.