{"id":8797,"date":"2017-03-18T15:38:56","date_gmt":"2017-03-18T14:38:56","guid":{"rendered":"https:\/\/www.smolio.ch\/wissen\/head-thoughts-vs-gut-feeling-how-emotions-influence-our-financial-decisions\/"},"modified":"2017-03-18T15:38:56","modified_gmt":"2017-03-18T14:38:56","slug":"head-thoughts-vs-gut-feeling-how-emotions-influence-our-financial-decisions","status":"publish","type":"post","link":"https:\/\/www.smolio.ch\/en\/wissen\/head-thoughts-vs-gut-feeling-how-emotions-influence-our-financial-decisions\/","title":{"rendered":"Head thoughts vs. gut feeling.\nHow emotions influence our financial decisions"},"content":{"rendered":"Lesedauer<\/span> 3<\/span> Minuten<\/span><\/span>

We humans are rational to a limited extent.
\nThis saves us time.
\nBut irrationality can have high costs, especially when it comes to financial decisions.
\nIrrational decisions often cannot be clearly identified.
\nThis is because even rational decisions are often made unconsciously.
\nWe are guided by experiences and feelings and cannot always separate the two.
\nWhen does our mind decide, when do our emotions? <\/span><\/p>\n

<\/p>\n

Especially when it comes to financial issues, it is dangerous to let your emotions get the better of you.
\nTake Warren Buffet, for example, probably the most successful investor of all time.
\nIt is often said of him that he would focus on his <\/span>“Gut feeling” <\/b>leave.
\nHe has it in his blood.
\nHow should we understand that?
\nHe talks about the “temperament” that an investor needs to enjoy investing and stick with it.
\nHe also warns that “nothing numbs rationality more than money earned without effort.”
\nHe also says that “successful investing takes time, discipline and patience.”
\nIt doesn’t sound that simple with the gut feeling. <\/span><\/p>\n

\"\"<\/a>\"\"<\/p>\n

Warren Buffet has decades of experience and makes his judgment based on a variety of criteria.
\nHe takes a close look at the companies and people he invests in.
\nAnd yes, he may not even be aware of some of his criteria.
\nBecause he is a professional, he has already automated this decision-making process. <\/span>Automation and emotions are two different things.<\/b> Both help us to make decisions quickly and both are commonly referred to as gut feelings.<\/span><\/p>\n

But let’s take a closer look at the differences.
\nFor example, we have <\/span>Automated<\/b>how we lock the front door in the morning, we’ve done it a thousand times.
\nWe no longer have to consciously deal with it.
\nAnd for this reason, we probably can’t remember how we locked the front door this morning.
\nThis is automation, internalized knowledge.
\nAt some point, we decided to lock the front door every morning. <\/span>quite rational. <\/b>The following is different.
\nWe entrust our front door key to our new neighbor because he seems trustworthy, drives a Volvo and is, after all, our neighbor… We don’t know whether he uses the opportunity to spy on our cupboard or sample our expensive whiskey.
\nBut we don’t suspect it.
\nSo have we imagined this <\/span>well thought out?
\nNo, it’s a gut feeling, or just positive emotions <\/b>opposite a sympathetic-looking neighbor. <\/span><\/p>\n

Prof. E. Winter has researched the topic and gets to the heart of the matter: <\/span>It is not complex information that gets in the way of good decisions, but our emotions.<\/b> We want to feel good, to have a good feeling.
\nWe let ourselves be guided by emotions.
\nWhen we talk about gut feeling, we don’t know how much of it is based on experience.
\nSo when it comes to financial matters, let’s consciously use our brains. <\/span><\/p>\n

How do you do that?
\nIt’s actually quite simple… Be aware of it.
\nAm I buying the share because of the sounding name or the performance?
\nIs the insurance advisor just likeable or do I also get the <\/span>Facts I need to decide on a financial product<\/b>?
\nDoes my bank simply give me a good feeling or does it really perform best? <\/span><\/p>\n

<\/sml-c2a-download><\/p>\n

\"\"<\/a>\"\"<\/p>\n","protected":false},"excerpt":{"rendered":"

We humans are rational to a limited extent. This saves us time. But irrationality can have high costs, especially when it comes to financial decisions. Irrational decisions often cannot be clearly identified. This is because even rational decisions are often made unconsciously. We are guided by experiences and feelings and…<\/p>\n","protected":false},"author":5,"featured_media":4144,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2395,2208],"tags":[2449,2388,2573],"class_list":{"0":"post-8797","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-behavioral-finance","8":"category-investing-in-the-stock-market","9":"tag-decision-error","10":"tag-investment-decisions","11":"tag-irrational-decision"},"nelio_content":{"autoShareEndMode":"never","automationSources":{"useCustomSentences":false,"customSentences":[]},"efiAlt":"","efiUrl":"","followers":[],"highlights":[],"isAutoShareEnabled":false,"networkImageIds":[],"permalinkQueryArgs":[],"series":[],"suggestedReferences":[]},"featured_image_urls_v2":{"full":["https:\/\/www.smolio.ch\/wp-content\/uploads\/2017\/03\/salad-2114149_1920-e1489854761554.jpg",999,700,false],"thumbnail":["https:\/\/www.smolio.ch\/wp-content\/uploads\/2017\/03\/salad-2114149_1920-e1489854761554.jpg",315,221,false],"medium":["https:\/\/www.smolio.ch\/wp-content\/uploads\/2017\/03\/salad-2114149_1920-e1489854761554.jpg",800,561,false],"medium_large":["https:\/\/www.smolio.ch\/wp-content\/uploads\/2017\/03\/salad-2114149_1920-e1489854761554.jpg",768,538,false],"large":["https:\/\/www.smolio.ch\/wp-content\/uploads\/2017\/03\/salad-2114149_1920-e1489854761554.jpg",999,700,false],"1536x1536":["https:\/\/www.smolio.ch\/wp-content\/uploads\/2017\/03\/salad-2114149_1920-e1489854761554.jpg",999,700,false],"2048x2048":["https:\/\/www.smolio.ch\/wp-content\/uploads\/2017\/03\/salad-2114149_1920-e1489854761554.jpg",999,700,false],"davenport-blog-thumb":["https:\/\/www.smolio.ch\/wp-content\/uploads\/2017\/03\/salad-2114149_1920-e1489854761554.jpg",990,694,false],"davenport-blog-thumb-grid":["https:\/\/www.smolio.ch\/wp-content\/uploads\/2017\/03\/salad-2114149_1920-e1489854761554.jpg",514,360,false],"davenport-blog-thumb-widget":["https:\/\/www.smolio.ch\/wp-content\/uploads\/2017\/03\/salad-2114149_1920-e1489854761554.jpg",220,154,false],"davenport-blog-thumb-masonry":["https:\/\/www.smolio.ch\/wp-content\/uploads\/2017\/03\/salad-2114149_1920-e1489854761554.jpg",360,252,false],"woocommerce_thumbnail":["https:\/\/www.smolio.ch\/wp-content\/uploads\/2017\/03\/salad-2114149_1920-e1489854761554.jpg",300,210,false],"woocommerce_single":["https:\/\/www.smolio.ch\/wp-content\/uploads\/2017\/03\/salad-2114149_1920-e1489854761554.jpg",400,280,false],"woocommerce_gallery_thumbnail":["https:\/\/www.smolio.ch\/wp-content\/uploads\/2017\/03\/salad-2114149_1920-e1489854761554.jpg",300,210,false]},"post_excerpt_stackable_v2":"

Lesedauer 3 MinutenWe humans are rational to a limited extent. This saves us time. But irrationality can have high costs, especially when it comes to financial decisions. Irrational decisions often cannot be clearly identified. This is because even rational decisions are often made unconsciously. We are guided by experiences and feelings and cannot always separate the two. When does our mind decide, when do our emotions? Especially when it comes to financial issues, it is dangerous to let your emotions get the better of you. Take Warren Buffet, for example, probably the most successful investor of all time. It is…<\/p>\n","category_list_v2":"Behavioral Finance<\/a>, Investing in the stock market<\/a>","author_info_v2":{"name":"Sarah","url":"https:\/\/www.smolio.ch\/en\/wissen\/author\/sarah\/"},"comments_num_v2":"0 comments","_links":{"self":[{"href":"https:\/\/www.smolio.ch\/en\/wp-json\/wp\/v2\/posts\/8797","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.smolio.ch\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.smolio.ch\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.smolio.ch\/en\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/www.smolio.ch\/en\/wp-json\/wp\/v2\/comments?post=8797"}],"version-history":[{"count":0,"href":"https:\/\/www.smolio.ch\/en\/wp-json\/wp\/v2\/posts\/8797\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.smolio.ch\/en\/wp-json\/wp\/v2\/media\/4144"}],"wp:attachment":[{"href":"https:\/\/www.smolio.ch\/en\/wp-json\/wp\/v2\/media?parent=8797"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.smolio.ch\/en\/wp-json\/wp\/v2\/categories?post=8797"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.smolio.ch\/en\/wp-json\/wp\/v2\/tags?post=8797"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}