Have you ever noticed how differently you think about your investments during calm markets versus turbulent ones?
In the world of investing, there’s a constant battle between logic and emotion. Most of the time, logic prevails—but during market declines, fear can take the driver’s seat, potentially sabotaging our long-term financial wellbeing.
The recent uncertainty surrounding President Trump’s tariff announcements is just the latest example where fear has temporarily overshadowed market logic. While it may feel urgent, this is merely the latest “crisis of the day”—a reminder of how easily short-term headlines can disrupt our rational thinking.
The Logical Foundation of Investing
When we strip away the noise, investing in global equities means becoming part-owners of real businesses—companies whose products and services we use every day.
As owners, we benefit from future dividends and potential share price appreciation as these businesses grow. This is a model grounded in business fundamentals and long-term value creation.
Company earnings, innovation, and the ability to adapt to inflation are what ultimately drive returns—not short-term news cycles. That’s why global equities have historically been among the most effective tools for building wealth and hedging against inflation.
When Story and Emotion Override Logic
Despite this strong foundation, our investment decisions are often shaped more by stories and emotion than facts. In good times, the narrative is optimistic: progress, innovation, and a brighter tomorrow.
But occasionally, fear dominates. Pessimism spreads. Headlines scream uncertainty. And logic gives way to reaction.
Psychologist Jonathan Haidt offers a powerful metaphor to explain this conflict: our rational mind is like a rider, but our emotional self is the elephant. The rider may know the right direction, but when the elephant decides to bolt, logic alone may not be enough to hold the course.
In investing, the rider knows we should stay the course during downturns. But when markets fall, the elephant panics—and many investors act on that fear.
Standing Firm in Turbulent Times
What history teaches us—time and again—is that fear fades. Even the deepest crises pass. The pessimism of today becomes the missed opportunity of tomorrow.
At Wells Gibson, we’ve walked with clients through many storms—from the 2008 financial crisis to the pandemic shock of 2020. We remember vividly how some were ready to sell everything in March 2020, convinced the worst was yet to come. But by staying anchored to their financial plan and long-term vision, those clients witnessed a remarkable recovery and are now in far stronger positions.
Warren Buffett captured this principle best:
“Be fearful when others are greedy, and greedy when others are fearful.”
If current market conditions have left you unsettled, please don’t hesitate to reach out. At Wells Gibson, we’re not just here to manage investments—we’re here to support you through every market cycle.
Sometimes, a calm conversation is all it takes to keep your “elephant” on the right path.
By staying disciplined, focusing on long-term goals, and trusting in the logic of sound investing, you’ll be well-positioned to achieve lasting financial independence.
Source: Humans Under Management
Let’s continue this journey together. Your future is worth it.
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