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The best investors aren’t defined solely by knowledge or access to information. Much like world-class poker players, their real edge is mental game—the ability to stay composed and make sound decisions under pressure.

Maria Konnikova, in her work on professional poker, notes that what separates the truly elite from the merely good is psychological fortitude: the capacity to perform consistently despite setbacks, mistakes, and poor short-term results. Investing is no different. Success often hinges less on finding the “right” stocks and more on maintaining discipline when fear and uncertainty are highest.

The Pressure Test

Investing pressure takes many forms:

• Market volatility shaking your confidence
• Negative forecasts fueling widespread fear
• Pullbacks that make you question past decisions
• The belief that “it will only get worse from here”

This environment tempts investors to react by selling low, chasing returns, or abandoning a sound strategy.

The Perfection Trap

Many investors carry a perfectionist expectation: no losses in down markets, full participation in every rally. This impossible standard breeds frustration and poor choices. Markets are uncertain. Even the best investors endure drawdowns and missed opportunities. The goal is resilience, not perfection.

Simplify to Strengthen

Psychological endurance fatigues with overuse. The more variables you try to track or control, the faster you burn out. Build fortitude by simplifying decisions:

• Define a clear strategy
• Filter out noise that doesn’t impact long-term goals
• Commit to rules that keep you grounded when emotions spike

And that’s what we’re here for. When the noise feels overwhelming or the path seems uncertain, we’ll remind you of the plan we’ve built. We’ve laid the groundwork with a clear, durable strategy. Together, we’ll stay steady, cut through distractions, and remain focused on what truly matters: reaching your long-term goals.

-Scott

(c)Behavioral Finance Network

In everyday life, our feelings help us survive and thrive. Fear keeps us out of danger. Excitement pushes us toward opportunity. Intuition helps us make fast decisions when time is short. These emotional instincts are useful, sometimes even lifesaving.

But when it comes to investing, the very feelings that serve us well in other areas can work against us.

Feelings & Investing

Take fear, for example. In life, if something feels dangerous, it’s often smart to back away. But in investing, fear during a market downturn can prompt investors to sell, often at a loss, transforming a temporary market loss into a permanent financial loss.

Likewise, when markets are rising, fear can resurface in another form: “The market’s too high, the fundamentals don’t support it. It’s due for a pullback.” While following such feelings and intuition may seem right, they often come at a significant cost.

Excitement can be just as deceptive. Investors are tempted chase what’s “hot”, buying into the latest trend because it has been going up in value. Emotional excitement may tempt us to buy high, but my experience has been that such action often results in regret when the trend suddenly reverses.

And then there’s intuition. In relationships or careers, gut calls can be helpful. But investing rewards discipline, not instinct. The market often moves in ways that feel irrational. Relying on your gut often means reacting to noise, not fundamentals.

Becoming a More Successful Investor

Successful investing is about replacing reactive emotion with thoughtful process. It doesn’t mean ignoring your feelings, but it does mean recognizing when they may be leading you astray. Just as you wouldn’t buy a car or home based solely on emotion, you shouldn’t manage your portfolio that way either.

In life, feelings are guides. In investing, they need to be questioned and checked. That’s one of the key reasons I’m here—to help ensure your financial decisions are grounded, intentional, and aligned with your long-term goals.

Scott

©The Behavioral Finance Network.

Disappointment and Delight

Framing Investment Expectations

– Scott

Investing is inherently uncertain. Global economies and financial markets are shaped by countless variables—many of them unpredictable and beyond our control. Meanwhile, the media floods us with attention-grabbing headlines, and impulsive investors can sway markets dramatically in short bursts. In such an environment, how should investors respond? How can anyone succeed amid so much noise and uncertainty?

Financial columnist Sam Ro captured the essence of this challenge by breaking the future into three possible scenarios: (1) markets improve and rise in value; (2) markets decline, but eventually recover and move higher; or (3) markets decline and never recover. He then noted an important fact: the third scenario has never occurred. And while anything is possible, betting on an outcome that’s never happened may not be a sound investment strategy.[1]

Planning for Most Likely Outcomes

If Scenario 1 plays out and markets continue climbing from here, the best course of action is clear: remain invested. That one’s easy.

But what if we get Scenario 2? This is when many investors get spooked, selling in an attempt to protect themselves from further losses, waiting for “better times” before getting back in. But is that wise? Only if you can accurately time the market, which no one can. If markets decline but are expected to recover and move higher (we just don’t know when), then isn’t the most responsible approach to stay the course?

The Responsible Choice

History shows that the stock market alternates between Scenario 1 and Scenario 2. Sometimes it rises steadily; other times it declines before eventually recovering. But regardless of which scenario unfolds next, the most effective investment decision has always been the same: stay the course.

We don’t need to predict the next recession, interest rate move, policy shift, or trade dispute. What we can control is our discipline. And that discipline, sticking to a well-designed strategy through all market conditions, can be surprisingly comforting. If the most likely long-term outcome is that markets will ultimately move higher, then patience, discipline, and ignoring the short-term noise become our most valuable tools.

– Scott

[1] Sam Ro, TKER Substack, May 18, 2025

There’s no shortage of things to worry about today—tariffs, economic uncertainty, global unrest—and all of it can impact our financial future. The media often magnifies these concerns, focusing on fear because it grabs attention. Over time, this constant exposure can affect our mood, cloud our thinking, lead to unproductive decisions, and—most importantly—erode our personal happiness.

Choosing Happiness

While life’s circumstances influence our moods, lasting happiness has more to do with the focus of our lives than the circumstances of our lives. We may not control everything happening around us, but we have full control over what we choose to dwell on.

Cynicism and pessimism are easy—they’re almost automatic. But choosing optimism and happiness? That takes effort—and yields far greater rewards. Optimism doesn’t deny reality; it reframes it. When we intentionally focus on what’s going right, we boost both our mindset and our mood. After all, what good is reaching your financial goals if you don’t enjoy the journey?

Just Laugh

One of the simplest ways to lift your mood is to laugh more. Young children are often the greatest examples of happiness. They are quick to forgive, and they laugh—a lot. Studies show the average four-year-old laughs 300 times a day. The average forty-year-old? Just four.[1]

That’s unfortunate, because laughter triggers the release of dopamine, oxytocin, and endorphins—chemicals that elevate mood, reduce stress, and strengthen human connection. Good-natured humor is a powerful tool for well-being.

You don’t need to be funny to benefit. Surround yourself with people who make you smile. Even small acts—like offering a compliment or sharing a laugh—can create positive, unifying feelings.

In a world filled with worry, choosing to laugh, smile, and engage with optimism is a powerful act. We can’t control markets or headlines, but we can control our mindset. Shifting from worry to joy brings clarity, emotional balance, and peace of mind. And that’s not just good for your well-being—it’s good for your financial future.

– Scott

Investors are always seeking for more certainty; we all want to know what the future will hold and make the best decisions today for a better tomorrow. This desire stems deep in our physiology. The brain may consist of a lot of gray matter, but it hates gray areas. It wants certainty and rewards us with great peace when we find it.

The challenge is that much of the future, especially in investing, is uncertain by nature. So, when we feel more certain about something in the future with the economy or stock markets, it is nothing more than a feeling or perception of the future, which can be wrong.

Feeling More Certain or Uncertain

Recently the Wall Street Journal highlighted a few investors who “threw in the towel” in March, going to cash. The common reason behind this was that the investors said the future was more uncertain, so they are going to wait for a more certain time to reinvest. But is the future more uncertain now than at any other time, or is it just our perception or feeling about certainty?

Investors felt quite certain in December of 1999 about the potential for technology. Not only were they fully invested, but they were leveraged. That great certainty about the future lasted only a few months and then came one of the biggest crashes of our generation.

In January of 2020, investors and experts alike were very certain about the economy and markets for the year. But then COVID shut down the global economies. We felt certain, but the uncertain happened.

The Benefits of Uncertainty

When we are certain about a future outcome, we may take on more risk than we are prepared for – simply because we don’t see it any other way. Conversely, when we are uncertain, we tend to be more cautious. We tend to plan more thoughtfully and extensively for our future. We employ diversified strategies because we don’t know what will do well.

While uncertainty can be a very uncomfortable feeling, we can embrace it as investors because it actually helps us make more prudent and discerning financial decisions. After all, the future is uncertain – whether we like it or not.

– Scott