I’m attending my first virtual conference this week. It’s one of many “firsts” that I’ve participated in this year. In a session about changing investor behavior, the presenter, Barbara Kay, said something that got my attention. While discussing how emotions can impact our behavior, she commented that when emotions are ON, reason is OFF.
It’s easy to point to the dramatic crash in global markets in March and April of this year to illustrate that point. Investors panicked when the economy shut down and fear drove their investment decisions. The right decision to make during that market correction was to BUY, not SELL, but some investors couldn’t put their emotions aside when making those choices. Investors now are letting the emotions of the upcoming election drive their investment decisions as we await the results on November 3rd.
This also applies to our everyday lives. Emotions are strongly at play in how we are responding to the pandemic. We are making many choices not based on facts, but how we feel.
We get emotional when our pets ignore the weeks’ worth of obedience training we paid for, we’re upset when we ask our kids for the third time to clean up their rooms, or are scared and tearful when we receive a diagnosis from our doctor.
Emotions are part of our human brain, but those emotions must be turned off when we’re making decisions. It’s not easy to do. In this uncertain year of years, we all have had to adjust and be flexible in our lives. The next time your faced with an important decision, turn your reasoning on and put your emotions aside.