Emotional Investing

As Behavioral Advisors, we strongly believe that successful investing results from acting toward the achievement of your goals and not reacting to the current news or heaven forbid someone’s market forecast (better described as guesses).   There are also other behaviors which negatively impact the investment outcomes for people.  The largest behavioral factor is allowing emotional feelings to cloud one’s decision-making with regard to an investment.

This is common when we inherit a property or individual stocks and add the feelings for the donor into the financial decision.  Instead of looking at the inherited gift as money received from a loved one, we often end up placing emotions on the asset.  This often results in a less than ideal investment decision being made. Granted – a nice problem to have; but a problem none the less.

Picture of a fortune cookie with the phase inherit a large sum of moneyCarl Richards, who has written an excellent book called the “Behavior Gap” dealing with behavior and financial planning, has put together a video which highlights this common problem.  Clink on the button to view this 4 minute video.  As Carl Richards states, “It comes down to being open, being willing to ask the questions and being willing to assess if your needs have changed.  Yes, it’s hard to not get caught up in the past or get tangled up in our emotions, but don’t cheat yourself out of financial success because you feel sheepish talking about your feelings.”

Carl Richards – Emotional Investing
The foregoing content reflects the opinions of Crimmins Wealth Management and is subject to change at any time without notice. Content provided herein is for informational purposes only and should not be used or construed as investment advice or a recommendation regarding the purchase or sale of any security. There is no guarantee that the statements, opinions or forecasts provided herein will prove to be correct. Past performance may not be indicative of future results. All investing involves risk, including the potential for loss of principal. There is no guarantee that any investment plan or strategy will be successful.

About Dan Crimmins

Dan Crimmins, co-founder of Crimmins Wealth Management, is a financial coach and fee only financial planner. Have a financial question? ASK DAN


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