Do You Make Investments Based On Emotions?
Bangalore: Financial investments are sensitive matters and so, most of the times people make these decisions based on emotions. The tendency to relate emotions with sensitivity could be an unwise way to invest. However, convincing someone to cast aside his emotions while making investment could be easier said than done, reports Partha Sinha of The Times of India.
The emotions are an outcome of personality traits and therefore investment trends can portray one’s temperament. A person who is more resistant to the impact of volatility will be able to withstand risk better than one who sulks in uncertain times.
"The wise invest not hoping for the best, but they worry more about being prepared for the worst," says Prem Khatri, CEO, Cafe Mutual. One should make investment decisions and choose financial products that suit his temperament. A person comfortable taking risk can invest in products that show comparatively higher levels of volatility and the other person with different temperament can invest in less volatile products.
It has been seen that, although the person who invest in safe financial products may reap benefits from the returns but not more than the one who invests in riskier but more profitable products.
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