Today’s Prep:
Are you letting emotions sway your investing decisions? We talk about what emotions should you look out for and how can you invest based on logic.
Equipping Points:
What emotions are you prone to fall for when investing? How can you overcome the emotional grip? Making investment decisions based on emotions can cause your plan to not be successful. Today we’ll find out primary emotions to look out for and what to do about them.
When it comes to greed, it stops you from making intelligent and wise decisions. You might be tempted to time the market. Instead, what do you need to make your plan work? It’s good to keep some money set aside and not always chasing gains.
Fear might be whispering in your ear, especially when the market goes down. Talk to your financial advisor and keep working your plan so that you don’t let your emotions get the best of you when investing. Both fear and greed can be overwhelming.
Is pride causing you to do-it-yourself when it comes to retirement planning? You can access a lot of investing independent of an advisor. But what an advisor brings is helping you with behavior modification. They help keep your emotions in check and coordinate your plan. Don’t let guilt keep you down if you’ve been tripped up by your emotions in the past. We’ve all made mistakes and you have to get past it.
When an advisor presents a plan, they are not focused on emotions but on facts, truth, and logic. Your decisions are often based more in emotions, so having a third party to see things from an outside perspective can help you achieve your financial goals.
Listen to the entire episode or skip ahead using the timestamps below.
1:00 – Fun Fact: Apple has enough money to buy every major sports team in the world.
2:27 – Is greed good when investing?
3:58 – Are you investing with fear?
5:43 – Pride may cause you to do it yourself.
7:49 – Don’t dwell on guilt.
9:03 – Advisors are more detached from the personal emotions.
Today’s Takeaway:
“Making emotional decisions as opposed to rational and logical decisions: you don’t want to make emotional decisions, especially with something as important as retirement.“
-Eric Peterson
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