Your Instincts Can Kill You
Picture yourself strapped into a machine full of kerosene with 2 GE engines pushing you toward a black speck in the middle of an unending horizon of the ocean. You’re traveling at 150 miles an hour toward your aircraft carrier – which is that black speck, now more visible and coming at you fast. You’re in an F-18. You have your skill and the aid of a Landing Signal Officer on the carrier to land on a wire you cannot see and be caught by a hook on your plane you cannot see. You’re guided in all the way, usually by a calm, steady voice, and if you do it right, you’ve landed successfully. But every once in a while you don’t do it right, and that calm voice in your headset starts screaming at you.
PULL UP, PULL UP
MORE POWER, MORE POWER
You also get visual cues. In the old days, a bunch of paddles waving frantically at you. Today, a bright red light on the deck. If you hear and see these, all you need to do is increase your power a bit, pull up on the stick and go around for another try. But if you don’t hear and see, you hear a loud alarm.
Not too long ago, this is exactly what happened on the USS Carl Vincent. A pilot ignored everything he was seeing and hearing, and he slammed his F-18 into the deck of the carrier. He survived (or I wouldn’t be sharing this story), but this prompted the US Navy to investigate why every rational input was ignored. Before I go on, let me ask you whether you are satisfied with how your investments are being handled?
Yes? You don’t need to watch the rest of this video.
No? The rest of this video applies to you.
The Navy found that when emotions and fear kick in, we humans – based on some biological and chemical triggers in the brain – rely on instinct, not rational thought. Landing on a carrier is not instinctual! When the pilot from the Carl Vincent went to instinct, the crash was inevitable.
The Navy found they had to replace human instinct with a new “learned” instinct. Not just rational explanations and training, but intense training And practice which literally created a new instinct. This technique can be used to improve your investment performance.
If you’re dissatisfied with how your investments are being handled but still doing the same thing or relying on the same advice, it’s time to change.
Human Instinct – investing on fear and greed
Successful Investing Instinct – investing based on goals and consistency
So, if you’re dissatisfied with how your investments are being handled and would like to discuss it further or just get a second opinion, give us a call. We’d be happy to buy you a cup of coffee and talk about how not to crash.