Could you be an Investment Addict?

Does the idea of having to appreciate long-term value in an investment bore you?

Do you just love the idea of instant gratification?

And which is a better guide to good money management?

Do you know how to use a credit card responsibly or have a plan to stay on track with your retirement savings strategy?

Our minds crave short-term wins over sticking to a long term plan everyday.

It’s also why the Bounty bar at the service station looks so much better when we’ve decided we want to lose a few kilos.  The immediate buzz is what we’re after!

When a smart money move pays off and we manage to make a great gain, we get an emotional high that leaves us wanting more.  It’s what neurotransmitters in the brain are wired to do, and why so many of us chase the ‘good feels’ or ‘warm and fuzzies’ we get when things go our way or we have a win.  We all love the fist-pumping action of a win!  And why we can get a little teary over it too.

The danger is when chasing this feel-good emotion trumps our better judgement, possibly tempting us to sell additional shares perhaps, even if it would be better to keep them a while longer or maintain the hold, rather than sell for the buzz we’ll get from netting a quick gain today.

So the next time you’re craving a neurotransmitter high of the investment kind… set up a way that will help you vet the idea first, such as making it a joint decision with your partner or financial adviser first.  Or even simply sleeping on it.

Someone who’s not emotionally involved can bring you back down to earth, give you the reality check you may be needing, and help you model different outcomes, like how much extra money you may be able to earn if you keep your investment in the market another  or two, or five or ten years.  Alternately, selling may be the best idea and you’ll get the green light.

But if it doesn’t work out, and you’re still after that neuro-high, carve out a small portion of your portfolio that you can play with in order to gratify your need to tinker in the market, and feel the rush.  This way you won’t endanger your portfolio as a whole.

Do you keep a part of your funds aside for riskier investment options?

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