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