G2G - The Psychology of Investing

Guide 2 the Grind

Right now the media is flooded with all sorts of experts giving their opinion on the market and what’s happening. Some say it’s good, some say the sky is falling. The one thing nobody seems to be talking about though is the psychology behind what's happening.

Though people generally only think about numbers when they picture the markets in their minds, behind all of those numbers are people, and those people are making choices based on their current psychology.

I’m talking about behaviour and the thought processes behind that behaviour.

So what makes someone invest or not invest?

There’s all kinds of sub-categories we could explore, but at the end of the day, it all comes down to fear. See, we like to think that we’re rational and logical beings, but that typically only comes into play once the decision is already made based on emotion. Most people “go with their gut” and justify their choice later based on their view of the facts. (Or at least the story they tell themselves)

Either you fear missing out on an opportunity, or fear losing your money, which is in turn, losing the opportunities that money can afford.

Your definition of “risk” is the deciding factor.

And we hope that that risk doesn’t lead to the most self-destructive emotion of all… Regret.

Have a listen to JT and I on this episode of “Guide 2 the Grind” as we explore some of the behavioural psychology behind investing, and who the right type of investor is to take advantage of current market conditions.

www.guidetothegrind.com