This Queensland Road Safety video addresses how motorists are good at identifying risk but tend to act impulsively rather than weighing the consequences.
Stock market investors face a similar conflict between their risk antenna, which warn of elevated risk, and the tendency to act impulsively despite the possible consequences.
Take a deep breath. Pause. Be patient.
Wait for the market to show clear direction before making a decision.
Otherwise, acting impulsively, your chance of success is no better than flipping a coin. Often less.
Stick to your backup plan.
Colin Twiggs is a former investment banker with almost 40 years of experience in financial markets. He founded PVT Capital (AFSL number 546090), which provides income and growth strategies to wholesale clients.
Colin also co-founded Incredible Charts and writes the popular Patient Investor newsletter.
Using a top-down approach, Colin identifies macro trends in the global economy and then combines fundamental and technical analysis to evaluate opportunities in sectors that stand to benefit.
Focusing on interest rates and financial market liquidity as primary drivers of the economic cycle, he warned of the 2008/2009 and 2020 bear markets well ahead of actual events.