We need our heart in matters of love and family and even food, but when it comes to investing, it’s the head that matters more.
Your heart will push you to invest where others are putting their money – the hottest stock pick, the latest crypto currency, the new IPO or fund offer, the newest residential real estate deal and so on.
Your heart does this – because it doesn’t want you to miss out on what others are saying is the best thing to do. The heart hears ‘best’ and wants in.
But hey, stop a minute and think. Are you investing to satisfy your heart’s desires? Or are you investing for your financial future? If the latter is true, then you need to think with your head and then invest.
What looks good in someone else’s portfolio needn’t shine in yours because your circumstance, financial status, risk taking ability and future plans are unique. Unless, you use your head – you are at risk of making mistakes in blindly following others or shiny advertisements even and then you end up losing money with no way of reversing the consequence of investing with your heart.
When it comes to investing, be objective not emotional, use your head not your heart.
Also read:
Dream the dream of a house, but don’t rush the decision
In the last two weeks I have had three conversations with young folk looking to buy residential property on loan. There is emotion involved, there is some amount of self-worth and status involved and there is always an element of trying to please elders involved.