Control This Emotion When Investing.
by Jawann Fleet
Legendary investor Warren Buffett once said something along the lines of "be fearful when others are greedy and greedy when others are fearful." (This is also common Wall Street sentiment.) Regarding emotional pull as it relates to human behavior when interacting with the market this quote should be an apt sentiment of what implications fear should play in investment decisions. I believe that the answer would be none.
Fear influences investment decision by making one act irrationally presumably. And Buffett as a seasoned vet on the market knows that investment decisions are no time for notions of fear or doubt to shroud crucial decision-making.
Furthermore one could conclude that fear causes one to be hesitant regarding their decisions perhaps and miss out on potential opportunities. Speculating upon cryptocurrency could be a perfect distillation of how these sentiments could spring up resulting in one to have potentially missed out on profits, for while some were being fearful about the volatility of the highly speculative market, other more greedy counterparts had assumed confidence and dabbled, some with great success of course others with more mixed outcomes.
The inherent nature of investment is that of dealing with and essentially manipulating risk, as long as one understands this then fear probably shouldn't be as much of a factor. More important should be effective preemptive measures to mitigate risk and thus perhaps some of our more apprehensive notions.