When investing, do you want the charming, smooth, suave portfolio manager? You know the one. He has a certain je ne sais quoi. He walks into the room. Every head turns. He moves through the room, shaking hands, perfect anecdote for every conversation, leaving everyone in laughter as he glides effortlessly to the next. When he gets to the bar, he orders a martini. Straight. Think of personality-based investing as if you’re the Great Gatsby. Everything looks great…well, until it doesn’t.

So, your portfolio manager thought things were looking good. They told you to make specific investments. They bought and sold based on an assumption, a hunch, a vibe, and you followed their advice because they must have some insight, some crystal ball which allows them to know the best decision to make for you.  But take away the esoteric gut feelings and hope, and underneath all the smooth talk and confidence is nothing more than how they were feeling today. In the world of investing, it might be the aggregate of how thousands of people are feeling today, following a buzz or their intuition. But, at the end of the day – well, do you remember what happened to The Great Gatsby? There was no substance to his actions, just a dream. A beautiful dream, and I’ll be the first to say, I wish Gatsby had won. If someone had sat him down, walked him through the numbers, the outcomes, and more importantly, if he – the most important decision maker in his life! – had been willing to hear the keen insight of others, things might have turned out differently.

When it comes to investing, one cannot rely on personality or what makes them feel good. Investing has nothing to do with feelings. Feelings do not produce results. What produces results? Habits. Actions. Decisions. When committed to reaching ones’ financial goals, put the emotions away and look at the research. Research-based investing attempts to sift out the noise and turbulence of the modern economic and market environment and instead focus on agility, objectivity, and risk management. This strategic approach, coupled with ones’ commitment to developing good investor habits, is the frontier of personal finance.

It takes time and guidance to steer towards a course of discipline, patience, and objectivity when it comes to investment strategy. Emotions have their place, but not in finance. Know the numbers, live within your means, and make decisions based on analytics, statistics, and facts. When meeting with your financial advisor, ask them if their recommendations.


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