Stress and Decision Quality
Stress decides badly.Write the rule before it arrives.
- During stress
- Before stress
- Sells a sound investment
- A rule already written
The financial decisions made during a stressful stretch are disproportionately the ones later regretted; which is a reason to write the rule down before the stress arrives, not while it's happening.
Selling a genuinely sound investment in a panic, right when cash is tight for an unrelated reason, is a decision made by the stress rather than the investment's actual merits; a pre-written rule ("I don't sell an investment for reasons that have nothing to do with the investment") is what would have overridden it.
Arguing about a big decision on an empty stomach after a terrible day rarely produces the same answer as the same conversation the next morning.
Do I already have a rule that would stop me from making this financial decision purely because I'm stressed about something unrelated?