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 co-founded Incredible Charts and writes the popular Trading Diary and Patient Investor newsletters.
Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.
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.
He founded PVT Capital (AFSL No. 546090) in May 2023, which offers investment strategy and advice to wholesale clients.