Do you ever hear something on the news or have something happen in your everyday life that pretty much instantly puts you into a panic?
I do.
For me it can even be something ridiculously trivial, such as finding out that the bus I’d planned on taking doesn’t leave every hour like I’d thought.
In my head I think “Oh no! That’s going to mess everything up! What will we do for the extra two hours we’ll have to wait before we can even start out?!”
Fortunately, despite overreacting to even silly stuff almost instantaneously, I also usually head in the opposite direction immediately afterward.
“Oh no! The world is ending because the schedule isn’t perfect!” becomes “Oh well, I’ll bring a book and it’ll work out” five seconds later. And if it’s a big thing, I take some time to think things over, plan out things I might want to do, and analyze their potential effects.
In other words, I’m not usually reactionary, despite these mini-freakouts in my head.
It’s important to know yourself and how you usually act when confronted with something you see or hear.
Being reactionary can lead you to do things that aren’t in your best interest. (Such as if a headline like “Dow drops 200 points!” results in your selling your stock, only to rebuy it again when the “Dow hits 10,000!” headline appears a few days later. Sell low, buy high = not so good.)
If you know that you are reactionary, you can build in safeguards or set rules for yourself that will give you some extra time to think things through before taking action, whether it’s on investments or anything else. There really just aren’t that many things in life that have to be decided and acted on immediately or else.
Posted in Investing on 11.09.09 with 3 comments.
When the Dow drops my reaction is always, “alright, great time for me to buy in!” when I really should wait on the sideline’s before jumping in. I jumped into the market too early and bought stock in some companies I shouldn’t have. I am now reigning in my overly enthusiastic responses!
I have mini freakouts all the time. They last a little longer than yours, I think. But shortly before any hyperventilation, I start realizing there are alternatives/ways to mitigate damage. And then I go calmly about my day. Until the next bit of news. It’s a little exhausting, and I’m working on it. But I think I’ll always be easy to freak out.
Jane, learning to reign in overly enthusiastic responses sounds good. Do you buy from a pre-planned list of stocks?
Abigail, I think knowing yourself is the key.