on March 24, 2026
During times of turmoil, people sometimes make rash decisions. We might buy things we don’t need, or act out of character, or uproot our lives in some way. The same is true in the world of investing. When people are scared they do things like “panic selling” their stocks or throwing all their spare cash at a new, unproven investment trend. This kind of emotional investing is rarely justified and usually doesn’t pay off, yet people continue to respond to market swings irrationally. Why?
Much of this has to do with simple human psychology. We are hardwired to pursue comfort and run from danger. Our “reptilian brain” is rooted in fight or flight, and sometimes it’s difficult to resist this primitive urge. To make matters worse, much of today’s news is centered around a doom-and-gloom narrative, using sensationalist headlines to get more views and clicks. This only keeps us in a state of fear and primes us to make unwise, kneejerk choices with our investments.
The news we consume is also paired with the stories we tell ourselves. External sensationalism can amplify or affect our internal narratives and cause us to engage in fear-based decision making. We might worry about personal stability (whether in a job, relationship, etc.) or fret about societal expectations. Or, if things are going well, we might start to believe that they will not continue that way and think, “Good things never last.” Our internal fears, trepidations, insecurities, and pessimism can all leak into our decision making and potentially affect our approach to financial planning and management.
My advice: talk back to your lizard brain! Stay rooted in reason and logic by turning to relevant data and trusting what it says. It’s also wise to consult a trusted financial advisor when you’re worried and feel yourself on the brink of a big decision. Additionally, limiting your news intake can help nip some of those emotions in the bud. If you’re constantly steeped in bad news and gloomy predictions, you’ll inevitably internalize some of that. So turn it off!
With these three strategies—reviewing data, consulting your financial planner, and curtailing news exposure (especially sensationalist news)—you should have the tools to resist emotional decision making when it comes to personal finance and investing.