Tuesday, November 1, 2016

Would Your Tendency Affects How You Invest?

Currently, I am in the midst of reading a book called "Better Than Before", by Gretchen Rubin. In gist, it is a book about changing our habits for the better. I am especially intrigued by the Four Tendencies mentioned by the author. Of course, these are nothing new, but I can relate to the way she is classifying them. 

The Four Tendencies that Gretchen Rubin is talking about are (extracted from the book):

1. Upholders (respond readily to both outer and inner expectations)
2. Obligers (respond readily to outer expectations but struggle to meet inner expectations)
3. Questioners (question all expectations, and will meet an expectation only if they believe it's justified)
4. Rebels (resist all expectations, outer and inner alike)

Basically, what she is trying to say is that depending on our responses to the inner and outer expectations, we tend to fall into either one of these tendencies. It can be better illustrated with the following diagram (source : http://gretchenrubin.com):

So, do you think our tendency affects how we invest?

I deemed myself as "Obliger" as usually the outer expectations will supersede the inner expectations for me. From investment perspective, I tends to value other people's (especially those reputable and more established financial bloggers) assessment/analysis more than my own. Also, if the stake is not too high, I tends to give in easily to the others. 

Of course, it doesn't means that I will just follow blindly on what other said or recommended but it seems that if I didn't consciously suspend my action, my initial tendency is to follow the herds. To be frank, I did fall into this "trap" during my initial trade on EV Energy Partners, EVEP (US Stock). 

Unfortunately, we can't really change our tendency but with such self-knowledge, we can be more aware of the risks that associated with it and counter it with mitigation action like not rushing into action for my case. 

In short, I do believed that our tendency affect how we invest. 

What is your Tendency and do you think it affects how you invest? 



  1. I'm more of a questioner. However, I think that tendency relates more to life in general rather than to my investing life. Hmmm

    1. U.N : I see, so does it means that you seldom question your own thesis/evaluation or thesis/evaluation from others? :-)

    2. Hi Richard, it's more like I'm still in the process of gathering tools to add into my investment toolkit. Need to know the strengths and weaknesses of each tool before I can really question my thesis in-depth. At my current stage, I know that I don't know, so I am working on it! :)

    3. U.N : It's a great start for the self-knowledge... I am sure you will go far with each improvement coming along the way... Keep it up!


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