Psychology and the Market

“The longer that I’m in this business, I’m just kind of wondering if money is not in the Math department but it’s in the Psychology department. We’ve been taught – if we were taught anything about money – it’s about spreadsheets and calculators and projections and it should be rational and reasonable. But when we go and open our account statement, we suddenly find ourselves in some kind of emotion. Sometimes, it’s a little bit like grabbing an electric fence you didn’t know was electric. We all know, no matter how worried or scared or excited we’re feeling: 2+2 always = 4; but when it comes to money 2+2 = feeling. Because as it turns out…money is not in the Math department, it’s in the Psychology department. So we don’t want to let our emotions and our feelings dictate investment decisions.”

– BARRY M. CORKERN