We live in a culture obsessed with self-expression.
Open Instagram, Facebook, or Twitter and you will find people on the social networking stage displaying their opinions, bodies, lifestyle, work, and play for the world to see. While previous generations have valued the suppression of emotion, this generation pours it out with all the authentic vigor they can muster.
Let’s keep it 100 though, suppressing emotions didn’t always work so well in the not-so-recent past.
A life lived in either extreme can be a clear and present danger to individuals, families, and societies. Sometimes the pendulum needs a good swing, but if swung too far, it just might clock us right in the face.
Feelings are an integral part of being human, but they can be an ugly tyrant.
This is obvious in money management. Short-term gratification might feel great, but long-term, not so much.
Similarly, if you invest (or not) based on your emotions, you are bound to make mistakes. Good luck letting economic news and stock market swings drive your decisions.
Investors, it’s been said, should think in decades... not days. This means you should learn to suppress your emotions about the stock market ticker tape.
Danish philosopher and psychologist, Svend Brinkmann, in his book Stand Firm: Resisting the Self-improvement Craze, though not speaking specifically about finances, wrote the following:
If you want to stand firm, it is a precondition that you aren’t easily knocked off your stride. We are constantly bombarded with appeals to our emotions—on television, in social media and in advertising—and this constantly changes what we want. If you constantly pursue ephemeral desires, you can’t stand firm. And if you can’t stand firm, you aren’t in a position to do your duty. You should therefore learn to suppress your feelings.”1
The general duty of the investor is to keep investing and stay invested. They learn (usually the hard way) that standing firm and “staying the course” over time often proves to be the right thing to do. Furthermore, they refuse to consistently act on the variability of wants shaped by news and ad algorithms that prey on our emotions.
This means that modeling the secret sauce over at Warren Buffett’s Berkshire Hathaway should be part of your investing arsenal. His partner, Charlie Munger, says Warren is “very good at doing nothing”.
Mark it down.
Practicing healthy financial habits will occasionally require you to suppress your emotions and stand firm.
1. p. 72.