(Originally posted on June 2nd 2009)
Emotions play an important role in the world of finance.Clinical data rose 7.1% because their flagship antidepressant will not reduce a person’s sex drive. You know something is wrong with the markets when there is a drop in the sale of condoms but an increase in the consumption of chocolate. Investments are similar to relationships. You have those that want to make a quick buck. They are the “Wham Bam, thank you Ma’am” kind. You have those people who want to test and try the waters before making a commitment. You have the people that bereft of reason or logic bail out at the first sign of trouble. You have the people that are willing to be patient and wait. I believe that the last has the best long term return. However the risk is that you may end up waiting for too long and lose everything. At some point an assessment should be made whether a relationship or an investment is going in the direction you want it to grow. If it is not then it will be best to let go and take whatever losses/gains you have recieved. The ideal scenario though is to be patient, get into the right investment that not only provides short term dividend gains but also long term capital growth. This sadly is not as easy to achieve or find in investments or relationships.