Emotions and Actions

"Action comes from tension, desire and fear. Action is the hard part." [https://seths.blog/2019/02/getting-the-word-out-2/]


Same goes for investing, managing our finances and everything else. To be aware, does not mean we will act and to act tends to come with an inertia. When we have too many emotions in conflict with each other, we would also hold off our action.


Despite trying to be all rational in deciding on our investment and trading actions and be as emotionless as we could, the one factor that really triggers us to click the button is emotion. An emotion, when strong enough, makes us carry out our next course of action and make decisions.


The emotions that drive us can sometimes be counter-productive and oppose the rational thinking. At times like this, we have to learn to overcome our emotions to carry out the "right" actions whether to - pay off debts, save money by delayed gratifications, cut losses, or take profits on our trades.


Emotion of desire often makes us more willing to average down than average up in our investments. The desire to 'gain back the losses' and 'prove ourselves right' is usually stronger than the desire to 'gain more from the existing gains'.


No one can understand our emotions better than ourselves. 


By being self-aware and learning to control our emotions, we could act more responsibly and constructively.





***
Check out my Blog Archives here for previous posts

Comments

  1. Completely agree with this statement - The emotions that drive us can sometimes be counter-productive and oppose the rational thinking.

    This is one of the major reasons why most traders fail. One needs to have a proper control on the same.

    ReplyDelete

Post a Comment

Popular posts from this blog

Shit happens and I lost my low-hanging fruits

Letters of Administration / Probate - DIY application

Success in life

Insights from interviewing candidates

Reflections for year 2023

Disclaimer:

The contents of this blog are author's personal opinions and do not constitute advice to hold, buy or sell any securities, commodities or assets mentioned. I do not guarantee the accuracy and reliability of any information provided, and shall not be liable for any losses incurred from reading my posts or using the materials herein. This blog may contain affiliate links to external sites.