Lorraine Salvo, CFP, CDFA Palisade Capital Management, LP
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In a perfect world, logic would always guide our financial decisions. Emotions wouldn’t come into play.
But we don’t live in a perfect world. Far from it.
That means our emotions impact our financial choices more than we realize.1
Shockingly as much as 95% of our purchase choices are made subconsciously, driven by our emotions—as little as 5% are based in logic (and that’s when we’re in a good headspace and feeling comfortable and secure).2
When we’re faced with uncertainty, fear and instinct can take over and push logic right out of the window.3
Your brain will make you want to react quickly to protect yourself and avoid the pain you anticipate from potential losses.4
Ironically, these instincts often make things worse. Emotional reactions can lead to poor choices and the losses you were trying to avoid in the first place.5
The best way to avoid letting your hardwired biases take over? Use these strategies. They can help you fare better in any crisis. They may even make you a savvier investor.
"We can't foresee or control downturns or upswings. We can only control our mindset, our emotions, and our financial choices."
Markets and economies are never predictable or under our control. We can’t foresee or control downturns or upswings. We can only control our mindset, our emotions, and our financial choices.
That’s easy to lose sight of during periods of economic uncertainty and financial stress.
But, if you can focus on the long game and improve your mental game, you’ll come out stronger and more prepared.
That can make you less vulnerable to hardwired human biases and help you make better financial decisions, no matter what the markets are doing.
As a financial professional, one of my most important jobs is to help you become a smarter, more capable investor. That involves using psychology and behavioral finance to help you learn more about how your brain works and improve your financial behaviors.
I’m also here to be an objective accountability partner. I talk my clients through emotional decisions, and I can be an important voice of reason and calm when markets are turbulent and it feels like the sky is falling.
If you’re curious about behavioral finance—or if you need a sounding board for a financial decision—I’m here for you. Don’t hesitate to call me at (201) 585-5455.
I’d be happy to answer your questions and share some more advice.
Lorraine Salvo, CFP, CDFA Palisade Capital Management, LP
P.S. Sign up for my emails to continue the conversation. My subscribers get my best insights!
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