Why Investing Needs Your Logic Than Emotions

OUR investment decisions are influenced by 150 different emotions that you experience in your lifetime. To invest successfully, you must manage your emotions, according to Daniel Crosby's seminal work, The Behavioral Investor, published in 2016.

- RAJAS KELKAR

Greed and fear are two powerful emotions that drive prices in financial markets. Most of the 150 emotions we experience culminate in greed or fear. Eventually, that makes you buy or sell any asset. You can set your emotions free only after making sense of the information that comes your way. While rationalising emotions is impossible, it is easier to derive them from statistics analytics that point in a particular direction.

By analysing the fundamentals of a business, a sector or an economy, you try to make rational decisions. However, on most occasions, managing emotions gets trickier than you think.