Singapore Investment: Understand your irrational investment behaviour

Singapore Investment: Understand your own irrational investment behaviour.

If you think you are rational every time you make a decision? You cannot be more wrong. The brain (specifically out brain) fools us most of the time. And almost predictably, like a computer program, our human decision making follows a certain pattern.

We think we are in control, but often the choices are made for us, without us even knowing it.

For example, you offer your child Milk or water, most child will likely choose Milk. But if you ask your child what he/she wants to drink, you are in trouble... It will end up with... "Waaa I want Cola, I want grape juice....!!!! I want the super duper power ranger drink because it gives the special doll."

Similarly, in finance and investments, you choices are often skewed by your brain.

You will also understand why people flock in herds, because people feel safer. Therefore in order to invest well, it is not about intelligence, it is also about temperament. Why some are more rational than the others? It's all got to do with how the brain is wired and how much of certain chemical signals we have in our brain that controls the Fight or flight response.