The greatest enemies of the equity investor are expenses and emotions. —Warren Buffet
Fear, anxiety, and greed can make us impulsive. These emotions can blind us to logic and make us vulnerable to all sorts of biases. That’s never more true than when we feel threatened or stressed.
When emotions run high and impulse takes over, we’re usually focused on reacting quickly to protect ourselves. That can lead to short-sighted, riskier decisions.
It can also result in more losses.
That’s the essence of what Warren Buffett is saying above. But that’s not all he’s saying.
He’s also telling us that the emotion, like any perceived enemy, can be fought—that you have power to set emotion aside and make better financial choices, no matter how uncertain the outlook may be.
That’s the focus of this month’s Visual Insights Newsletter. It shares simple things you can do to make smarter financial decisions.
The truth is that emotions are essential to the human experience. When they take the driver’s seat in financial decision making, however, they can skew your perspective and undermine logic.
Counteract this by recognizing intensive emotions and giving them some time to cool down before you make a choice. This can give you space to see the facts more clearly—and potentially lead to better, more logical financial decision making.
All information provided is for educational purposes only and does not constitute investment, legal or tax advice. Examples are hypothetical and for illustrative purposes only.