Don’t Let Your Emotions Spoil Your Financial Planning

Many of us believe we are sensible and disciplined investors — at least under normal circumstances. We create financial plans, allocate assets wisely, and promise ourselves to stay invested for the long term.
But the moment we hear about a “hot stock tip” or see markets falling sharply, that confidence often disappears.
Suddenly, the carefully crafted financial plan fades into the background. Panic sets in. Impulsive decisions take over — decisions that can ultimately cost us money.
So what changes in that moment?
 Why does our thinking shift so drastically?
The answer lies in something known as the “lizard brain.”

The Lizard Brain and Investing
The lizard brain is the oldest part of our brain — responsible for survival instincts such as fight or flight. It evolved to help ancient humans and animals react instantly to danger.
This quick, emotional response was perfect for survival thousands of years ago.
 But in modern financial markets, it can be extremely dangerous.
When markets fall or volatility increases, our brain often reacts as if we’re facing a physical threat. Losses in a portfolio can trigger stress, anxiety, and fear — even though there’s no real danger to our survival.
As a result:

• We panic sell during market corrections
• We chase rising stocks due to fear of missing out (FOMO)
• We abandon long-term plans for short-term comfort
• This is what happens when the lizard brain starts investing for us.

Why Emotional Investing Leads to Mistakes
Successful investing requires a mindset very different from what the lizard brain specializes in.
Good investing means:

• Creating a clear plan
• Staying focused on long-term goals
• Remaining calm during volatility
• Making decisions based on logic, not emotions

However, when emotions take control, we react instead of thinking. Research shows that emotional stress can override rational thinking, leading to poor financial decisions when left unchecked.
The good news?
 We are not helpless against this emotional pull.

How to Regain Control Over Your Investment Decisions
Studies in behavioral finance suggest that emotions can be managed through cognitive change — consciously reframing how we interpret a situation to influence our emotional response.
The next time market news makes your heart race, pause before acting and try these strategies:

1)Reset the Emotion
Negative emotions are natural — but they don’t have to control your actions.
If you’re feeling frustrated about missing a market rally, remind yourself:

• Missing out is normal
• Opportunities always exist in the market
• Instead of reacting emotionally, focus on finding companies with strong fundamentals that may still be undervalued. Markets reward patience more often than speed.

2)Relook at the Problem
Every market situation has another angle.
Bearish markets may feel uncomfortable, but they often present the best long-term buying opportunities. Many great investments are made during periods of pessimism — not euphoria.
Instead of fearing market corrections, consider adopting a contrarian mindset and accumulating quality assets for the future.

3)Change Your Point of View
Strong emotions can cloud judgment and shrink our perspective.
Try stepping back and viewing your situation like an independent advisor would. Ask yourself:
Is the original research still valid?
Have the company’s fundamentals actually changed?
Is the decline due to temporary market sentiment?
If your conviction remains strong, market volatility may be an opportunity — not a threat.

Give Your Rational Mind Time to Catch Up
When emotions surge, our instinct is to act immediately.
 But successful investing rewards those who pause, reflect, and respond rationally.
By reframing the situation, you allow your conscious mind to catch up with your emotions — helping you make decisions aligned with your long-term financial goals.

Final Thought
Markets will always fluctuate. Fear and excitement are inevitable companions in investing.
The key is not to eliminate emotions — but to prevent them from dictating your financial decisions.
A disciplined approach, backed by sound planning and emotional awareness, can help you stay on track even during uncertain times.
Happy Investing!

Inspired by insights from Morningstar
 (Source acknowledged for idea reference)