If you’ve ever plugged money into a slot machine, you have a sense of just how quickly rationality can evaporate when it comes to money. We know that a slick, shiny machine owes us no favours and that every win or loss is all up to chance. But that doesn’t stop even straight-laced individuals from falling prey to all kinds of flawed thinking. If you allow yourself to think about winning big – even for a moment – you’re likely to begin to believe that your winning streak will continue. Or that your losing streak will turn around if you just keep feeding coins into the slot.
The same thing happens in investing. For many people, the emotion we attach to it and the behaviour it provokes are strikingly similar to gambling. And like in a casino, the financial markets don’t owe you a thing. If you make emotional decisions with your money, you’re likely to pay dearly.
So what can you do to prime yourself for good decision-making – and therefore better investing? Check out my new article on GoldenGirlFinance.ca for a few key tips to keep on the right side of the investing track: http://bit.ly/OAJ4Jw