Investment decisions hinge on one crucial ability: emotional management capability. In fact, I am referring to the mental mechanism that humans inherently possess.
This concept of a mental mechanism can be viewed as a psychological "immune system" that helps us cope with the uncertainties of life and past losses.
In investment, emotional stability is of utmost importance, and the mental mechanism can aid us in optimizing our systems:
- Rational Decision-Making: Guides you from emotional reactions to rational thinking, enabling wiser choices.
- Adaptation to Change: Encourages you to break free from past constraints and boldly try new things.
- Psychological Reboot: Provides a mechanism that allows you to start anew mentally, adapting to new environments or challenges.
This mechanism or system can be understood as a self-regulatory process that enhances an individual's capacity to meet investment challenges through reflection, learning, and practice.
Moreover, this mechanism and system can be deliberately practiced; generally, the stronger this ability, the more specific the risk assessment and decision-making framework will be, increasing the likelihood of making the correct judgments in the face of market fluctuations!
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