In partnership with

Today’s Headline

💡 Series 5: Investor’s Mindset & Habits

Day 3: The Dangers of Emotional Investing (Fear & Greed)

If there’s one thing that can destroy a good investment plan faster than a market crash, it’s emotion. I’ve seen it happen over and over again — investors panic when markets drop and become greedy when markets soar. In both cases, emotions take control, and logic flies right out the window.

When I first started investing, I thought success came down to knowing what stocks to buy. I’d read all the reports, follow the news, and watch the charts. But the truth? The hardest part of investing wasn’t choosing the right stocks — it was controlling my emotions. Fear and greed were like two little voices in my head, constantly trying to convince me to act impulsively.

Want to get smarter — not just richer? Tap into curated financial wisdom from Money and stay ahead of the next big move in investing.

Does your car insurance cover what really matters?

Not all car insurance is created equal. Minimum liability coverage may keep you legal on the road, but it often won’t be enough to cover the full cost of an accident. Without proper limits, you could be left paying thousands out of pocket. The right policy ensures you and your finances are protected. Check out Money’s car insurance tool to find the coverage you actually need.

COMPARE PLANS

Understanding the Emotional Rollercoaster

Investing often feels like a rollercoaster ride — thrilling one moment and terrifying the next. When markets rise, we feel like geniuses. We start thinking we can’t lose. But when markets fall, those same confident feelings turn into anxiety and self-doubt.

Let’s break down the two emotions that drive most investment mistakes:

1. Fear – The fear of losing money can make investors sell at the worst possible time. When markets crash, fear convinces us that it’ll never recover. So we sell low… only to watch prices bounce back later.

2. Greed – On the flip side, greed makes us chase quick profits. When everyone else is making money, we jump in late, hoping to catch the wave. But more often than not, we buy high — and when the bubble bursts, we’re left holding losses.

The dangerous part is that both emotions feel logical in the moment. Fear whispers, “Protect your money.” Greed whispers, “Don’t miss out.” But both are liars when it comes to long-term investing.

The Psychology Behind Emotional Investing

There’s actually science behind this. Our brains are wired for survival, not investing. When we sense danger — like watching our portfolio drop 10% — our “fight or flight” response kicks in. It tells us to run away, which in investing means selling.

Similarly, when we see others getting rich quickly, the brain releases dopamine — the same chemical that makes us feel good when we win something. This drives us to join in, even if it’s risky.

In other words, fear and greed are hardwired into us. That’s why even the smartest investors struggle with them. The key isn’t to eliminate emotions — it’s to recognize them and learn how to manage them.

Common Emotional Mistakes Investors Make

Here are some of the most common ways emotions cause people to make poor investment decisions:

1. Panic selling during downturns – Many investors sell the moment their portfolio dips, thinking they’re protecting their capital. But markets move in cycles, and recovery often follows decline.

2. Buying into hype – When everyone is talking about a “hot stock” or “the next big thing,” emotions push us to join in, even when logic says the stock is already overpriced.

3. Checking portfolios too often – Constantly refreshing your investment app makes small market swings feel like huge events, triggering fear or greed unnecessarily.

4. Overconfidence after success – Making a few good trades can inflate your ego. You start to believe you have the “touch,” and that’s when risk-taking increases.

5. Ignoring your plan – Emotional investors often abandon their long-term strategies whenever markets get volatile. They switch funds, change allocations, or stop investing altogether.

Real-Life Example

Think back to the 2020 pandemic crash. Markets fell more than 30% in a matter of weeks. Investors panicked. Many sold their holdings to “cut losses.” But within months, the market rebounded sharply, reaching new highs by the end of the year.

Those who stayed calm and held onto their investments not only recovered but also saw strong gains. Meanwhile, those who sold out of fear had to buy back at much higher prices — or worse, they stayed out of the market entirely.

How to Keep Emotions in Check

So how do we stop our emotions from controlling our investments? Here’s what has worked for me and many seasoned investors:

1. Have a clear investment plan.
   When you have a plan that defines your goals, timeline, and risk tolerance, you’ll be less likely to make emotional decisions.

2. Automate your investments.
   Setting up automatic monthly contributions removes emotion from the equation. You invest consistently, whether markets are up or down.

3. Focus on the long term.
   Remind yourself that investing is like running a marathon, not a sprint. What happens this month or even this year doesn’t matter as much as the next 10 or 20 years.

4. Avoid market noise.
   Financial news can make even the calmest investor anxious. Instead of reacting to every headline, tune out the noise and focus on your plan.

5. Keep cash for emergencies.
   Having an emergency fund helps you avoid selling investments when markets are down. It gives you peace of mind and financial stability.

6. Learn from past mistakes.
   Every investor has made emotional decisions at some point. The key is to recognize them, understand why they happened, and do better next time.

The Power of Emotional Discipline

Emotional control is what separates average investors from great ones. Warren Buffett once said, “If you can’t control your emotions, you can’t control your money.” And he’s right.

The most successful investors aren’t the ones who predict the market perfectly — they’re the ones who stay consistent even when the market tests their patience.

Think of your emotions as waves. You can’t stop the waves from coming, but you can learn how to surf them. You can feel fear without acting on it. You can feel excitement without chasing every trend.

Developing Emotional Strength

Here are a few practices that can help you strengthen your emotional resilience in investing:

• Write down your “why.” Whenever you feel tempted to act emotionally, remind yourself why you started investing in the first place — to build wealth, secure your future, or provide for your family.

• Set realistic expectations. Understand that markets fluctuate. Losses are temporary if you stay invested in quality assets.

• Take breaks. When the market feels overwhelming, step away. Go for a walk, spend time with family, or focus on hobbies. A clear mind makes better decisions.

• Surround yourself with calm thinkers. Whether it’s mentors, advisors, or like-minded investors, having people who think rationally helps you stay grounded.

Final Day to Invest: Every City’s a Potential Surf Destination

Topgolf revolutionized golf by turning it into a social, tech-driven game for anyone. And they’ve made billions in annual revenue doing it. Surf Lakes is applying that same model to surfing, and investors can still join them until 10/30 at 11:59 PM PT.

_{This is a paid advertisement for Surf Lakes’ Regulation CF offering. Please read the offering circular at https://invest.surflakes.com}

Emotional Investing in Different Market Phases

During bull markets, greed takes the wheel. You’ll hear stories of overnight millionaires, and it’s easy to feel like you’re missing out. That’s when discipline matters most — sticking to your strategy and not overinvesting in hype.

During bear markets, fear dominates. The news gets gloomy, and it feels like the world is ending. This is when your mindset is truly tested. Instead of selling, this can be the best time to buy quality assets at a discount.

Recognizing these emotional phases helps you respond rationally instead of reactively.

My Personal Reflection

I’ve made emotional mistakes too. I once sold a great stock after a 15% drop, only to watch it double within the next year. That experience taught me that emotional decisions often cost more than market losses.

Since then, I’ve learned to pause before reacting. Whenever I feel fear or greed creeping in, I ask myself, “Am I making this decision based on emotion or logic?” Most of the time, that question alone saves me from making a mistake.

Final Takeaways

Investing isn’t just about numbers — it’s about mindset. Fear and greed will always exist, but how you handle them determines your success. The more you practice emotional discipline, the stronger and more confident you’ll become as an investor.

Remember: wealth isn’t built by reacting to every market movement. It’s built by staying patient, consistent, and focused on your goals — no matter how noisy the market gets.

Call to Action

So today, I want you to do one thing — reflect on your past investing decisions. Were they driven by fear, greed, or logic? Be honest with yourself. Once you’re aware of your patterns, you can start improving.

Train your emotions the way athletes train their bodies — through awareness, consistency, and discipline. Over time, you’ll find that staying calm when others panic is your true superpower in investing.

Stay patient. Stay grounded. And most importantly, stay invested.

[Live Life Grow Wealth]

🎓 Free Masterclasses to Unlock Your Investment Potential
Take your money skills to the next level with expert-led workshops designed to help you grow smarter and faster.

/https://register.go-leap.com/tadwebinar?am_id=yongheng6172

/https://superinvestorclub.go-leap.com/superinvestorclub-signup?am_id=yongheng2768

/https://register.go-leap.com/membership-tiers?am_id=yongheng1875

Recommendations Section

DISCLAIMER

I make no representations, warranties, or guarantees, whether expressed or implied, that the content provided is accurate, complete, or up-to-date. Past performance is not indicative nor a guarantee of future returns.

I am an individual content creator and not regulated or licensed by the Monetary Authority of Singapore (MAS) as I do not provide investment services.

All forms of investments carry risks, including the risk of losing your entire invested amount. Such activities may not be suitable for everyone. You are strongly encouraged to seek advice from a professional financial advisor if you have any doubts or concerns.