We are Hardwired to React Before We Think

Jul 2008

…our ancestors learned through trial and error that it was better to run first and think second.  After these sorts of experiences have compounded for a thousand centuries or so, it is no surprise that today we are hardwired to react before we think—to use emotions before reason.  Thus, when the S&P 500 undergoes a significant short-term decline, most investors experience an emotional response rather than a logical one—despite overwhelming evidence that emotional investment reactions are more apt to hurt than help.