Psychology of Investing, cont.

Here we are again, discussing “The Psychology of Smart Investing.” Key points the authors made were that “psychological traps such as loneliness, poor self-esteem, depression, wishful thinking, self-destructiveness, addiction to playing the markets, revenge and internal conflicts,” contribute to fear of making poor investment decisions.

Instead of identifying those traps, many investors just hire experts, not always a good idea.

Let’s turn to the self-help shelf and learn a bit about self-hypnosis. We’ll just come out and say it right now, in our opinion, most writings on hypnosis and self-hypnosis are bunk. So, you can find your own links to these topics. There are a few valuable nuggets in places, but IFO will leave it to you to find the ones that work for you.

In IFO’s experience, you will have to do it yourself. Most hypnotists are not capable of doing the deep thinking needed to solve this kind of problem. They concentrate on people who want to lose weight or stop smoking. You know. Easy stuff.

IFO hasn’t tried this on investing since she considers herself a pretty successful investor. If she didn’t, she wouldn’t be writing this blog. Although, do we detect a wee bit of poor self-esteem? A smidgen of wishful thinking? Maybe, but these haven’t stopped her.

She stumbled on this method during a terrible episode of “hip went out.” For no discernible reason, one day her hip, which had troubled her occasionally for years, suddenly went totally OUT. The pain was excruciating. She could hardly walk. What to do?

She sat down for a good hard think. When she was through thinking, she had a plan of action. Get a massage. Get hypnotized. Figure out what made the hip go out. Get better. And that’s pretty much how it worked out.

So, here we go: Get quiet and relaxed. Let your shoulders come down. Breathe calmly. Let your thoughts wander. Then start by welcoming your brain and asking it to open up to your consciousness. Explain that you want to understand underlying causes of your problems. Say you are willing to listen to whatever message your brain has for you.

After your brain helps you identify the trap or traps, ask how you got that idea? It’s not loneliness, or poor self-esteem, or whatever, that’s causing you trouble. It is something in your subconscious, where ideas have been implanted that lead you to mental or physical states that freeze you.

Some questions you must ask your subconscious are, “Who did this? Why did he/she/I do it? Why do I allow this to happen? What tools did the person(s) use to fix these ideas in my head?” (If you identify yourself as the culprit, ask what worse thing you might be trying to avoid.)

Here’s where the notion of how to fix an idea in your subconscious comes in. You need one or more of these:

1. Repetition – was the precipitating notion repeated over and over?

2. Identification with a group – We are X and we always Y, but I don’t want to Y any more.

3. Hypnosis -Note to self-hypnotist – don’t waste your time trying to drive a thought away with a contrary thought. You must figure out EXACTLY what new thought you want to implant in your mind. It’s no use getting rid of a bad thought unless you replace it with a good one.

It’s no good saying, “I’m a good person” to your self-hypnotized self. You have to know what makes you good after you have figured out why you don’t think that right now. What is a good person anyway? Not what other people (authority figure?) say. Do you really want to be like that? If yes, what can you do to become that person? Will you like him/her after you do those things?

4. Strong emotion – Earlier in your life did a really strong emotion hit you? Fear? Horror? Sadness? Joy? Whether bad or good, think about the specifics of that emotion – time of day, time of year, day time or night time, with people around or nobody around? What were you wearing, etc.  Did that event affect how I make investment decisions?

5. Authority figure -Leading culprits are: parent, spouse, teacher, religious leader, coach… If you have identified one of these, you need to ask why the person gave you that idea. What did that person have to gain by doing that? What do YOU have to gain or lose by having it?

The solution doesn’t occur overnight, but when you do get to the bottom of this you will feel relieved and calm and confident about how to attain your investment goals.


About InvestingforOne

I've been investing in various assets by myself using a discount broker for many years. Over that time, I've developed some theories that others might find useful. Plus, there is more to investing than money. Time, talent, work, friends, family all go into developing a good and satisfactory strategy.
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