Emotions Count: The Brain Chemistry Behind Investing – I’m sure most of us remember the powerful ad in the 80’s claiming “This is your brain on drugs.” This article gives a breakdown of your brain on investing. Elizabeth MacBride (@editoremacb) describes what scientists find happens to the brain of traders who endured a market bubble. There’s also a test to help you understand your own “theory of mind” which helps you judge other people’s emotions – a key element that can help or hurt you when investing.
Emotions count: Is your brain wired for investing? http://t.co/GnSNpHsuwr
— CNBC Top Stories (@CNBCTopStories) January 21, 2015
What Lost Decade? – It’s easy to forget that stocks can fall by 50%, after they have been rising for the last 6 years. For US stocks, this has occurred twice since 2000. But there were other areas of the market where excellent returns occurred. Here in lies the difficult part of investing. Having the discipline to maintain a diversified portfolio, especially when others around you are outperforming you. But patience is your friend in these scenarios. Michael Batnick describes this idea nicely in this article.
The value of not putting all your eggs in one basket. http://t.co/gPZzTVtuLH pic.twitter.com/gANfXJChlx — Irrelevant Investor (@michaelbatnick) January 20, 2015
Are you pulling a Pete Carroll with your money? – Many of us immediately second-guessed the Seattle Seahawks last play call in the Super Bowl Sunday night. It’s easy to diagnose problems in someone elses decision making. Why does it seem harder to do for ourselves? In this Marketwatch article, Brett Arends, describes seven ways others may be looking at our financial situation and thinking, “Why did they make that decision?”
Are you pulling a Pete Carroll with your money? http://t.co/rGotMRAfQn
— MarketWatch (@MarketWatch) February 2, 2015
The Disciplined Investor’s Worst Enemy: Tracking Error – The feeling of missing out may be as powerful as the feeling of not wanting to lose money. They both tempt us to do things with potential harmful long-term consequences. In this article, Tim Maurer, does a great job of sharing a story about the thought process we have when our portfolios don’t perform as well as the best performing index and how we can deal with it.
Tracking error: The empty feeling in your gut screaming that you missed out on something which was yours to be had. http://t.co/cZ35JSA8gX — Tim Maurer (@TimMaurer) January 12, 2015
