Well, there is a fairly new area of personal finance called Behavioral Finance that says that we ‘are wired’ to make the wrong investment moves at precisely the wrong times.
Huh? Yes, you read it right. It seems that the human brain hasn’t changed in many millenia. We are motivated by fear and greed. It is our survival instinct to ‘run from danger’ -market bottoms and to feast when there is plenty -buy high.
For many of us all analytical thought processes go ‘out the window’ when our basic flee or feast instincts kick in for us. -Good news for survival. Bad news for investing success.
Jane Nowak is a Financial Planner with Kring Financial Management located in Atlanta, Ga. Jane’s practice focuses on Women’s Retirement Planning and Financial Planning for Women. Her articles have been published on line at NASDAQ, Financial Planning Association and Womenetics.com. Follow Jane on Twitter at: http://twitter.com/moneygal2020