By tradition, February has always been the peak time for love and affection. To many, it is the season of hearts. Emotions run high this month. It is indeed an exciting time, but for investors, it’s also a dangerous period to make decisions. They should neither be swayed nor be affected in the least by the hubbub. Ultimately, emotions and the financial markets just don’t mix.
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| Image source: radarwire.com |
When it comes to investing, everything boils down to practical, smart decisions. It doesn’t matter how tough a person is; human beings are just vulnerable to emotional highs and lows, which can then lead to judgements which aren’t based on research or rational thinking. In a research by NerdWallet, nearly 50 percent of Americans acknowledge that emotions have led to overspending at some point in their lives. Majority of emotional spenders, moreover, are motivated by stress.
So how can emotional beings take out the emotion when building their portfolios? They need to pair up choices with artificial intelligence, which is often at the disposal of professional investment managers. They can leave some of the informational heavy-lifting to computers and algorithms, but with key input from experience and available data. It seems exciting to some and daunting to most, but the information age has already given way to reliable and secure management of big data.
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| Image source: CNN Money |
The founder of Whitman Asset Management, Charles Whitman uses fundamental and technical data to understand market environments and develop trading ideas that target exceptional returns with managed risk. To know more about investments, visit this website.
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