Are You In Control?
The Theory Of Control
In recent decades more and more people have chosen to shift their employment choices from the safe and the stable, to the exciting and unknown.
Studies have shown that in the 1980s about 90% of the American workforce took up lifelong employment with large businesses, whereas currently, more than a third of the workforce has now taken up self-employment. This long-term demographical trend may imply that people may be in the pursuit of their own authority and control over their actions. But why?
People in this day and age are consumed by media and self-help books that may motivate a person to drive change in their lives and act upon what is portrayed in front of them. Sounds simple right? well, it’s a bit more complicated than that.
You see, psychological scientists from the University of Columbia have stated that self-motivation is a skill that can be compared to reading or writing and can be learned and harnessed by any practicing individual. Once a person is more self-motivated, then a person is more likely to take action based on their motivation, giving them added control.
Scientists have complemented and recognised the existing correlation between self-motivation and control, and took being stuck in traffic as an example;
“You know when you’re stuck in traffic? Your mind will subconsciously start to brainstorm possible routes that might get you out of traffic as soon as possible. Even though the route may be longer, our brains become motivated by the idea of getting out of traffic faster, taking any route besides the one you’re currently stuck in.
The idea of taking back control excites and motivates the mind leading us to action”.
And lastly in our eyes, a piece of information missing from the puzzle of what drives self-motivation, and that is Accountability.
Once a person accepts that they are accountable for their actions, regardless of how meaningful these actions are, then they are more likely to find themselves in a position of control down the line. If you as a person ‘follows the stream’ without taking much action, then it is very unlikely that a person will find themselves in a position of control in the near or longer term.
Once we accept accountability for our actions, we will find ourselves in a greater position of control and subsequently at a higher level of self-motivation. Without the idea of acceptance of responsibility of our actions, then the will to drive change and control will not be as present, likely resulting in demotivation.
How Does This theory Apply With Investing ?
The Stock market or the crypto market is something that neither you nor I have control over, and so it’s easy to become demotivated when share prices in our existing investments decrease or even increase, leading us to make irrational buy or sell decisions.
However, we do have control over our actions, and that automatically puts us in a position of control when facing times of adversity in the market.
Accountability When Investing.
The first question we always ask people that are investing is…
‘Did you do your research?’
Unsurprisingly, the answer tends to lean towards ‘No.’
If you’re reading this, and you’re one of those people who jump on the FOMO Bandwagon without any thought, well then, you’ve just entered a psychological boobytrap.
I can tell you from now, you’re probably checking your Yahoo finance application a little bit too often, anxiously waiting to see where your shares are heading to when realistically, your time and energy can be allocated so much more efficiently.
Investing should be a well-thought-out decision, understanding the business your investing in and the potential behind your investments. These little actions of understanding will make you more accountable for your investment choices (and not some dude on Tiktok).
Once you’re more accountable, then you’re in a position to make more suitable and level-headed investment decisions, that in the long-term tend to reap the best rewards.
Motivation & Control In Investing.
As previously stated, a person tends to be at their highest level of motivation when they feel that they are most in control. If you missed the acceptance of onboarding your accountability, then at this stage, it is very unlikely that you either have control or motivation over your actions when investing.
This ultimately means that you’re more prone to making bad investment decisions which could cost you quite a bit of time, anxiety, and obviously money. In other words, you’re letting your anxiety get the better of you.
To get ahead of the irrationalities of the stock market, you need to be in touch with your emotions and face times of adversity as opportunities. By taking an informed approach to your investments, you’ve already found yourself in a better position to capitalise.
So our advice to you is, be patient, and take the time to understand what it is you’re doing. Once you do this, you’ll be more accountable and more in control of your emotions regardless of any situation that arises, leading to greater longer-term motivation and success. You’ll also improve your investing skills down the road (It’s a marathon and not a sprint, and you will make mistakes along the way).
“If you’ve invested blindly , then you’ve entered into a psychological boobytrap”
To Wrap it all up
You can never control the market. It may continue to keep going up, or it could crash tomorrow. That in essence goes against our instinct to demand control and to retain self-motivation. However, through the harnessing of your own emotions, and intellect, you may be very much in control of your actions. Which is a necessity.
Ask yourself today, if the Market had to crash tomorrow, would you be happy to ride the crash, or would you be a sellout?
If you’ve decided that you’re selling out of all your positions, I have a few question for you.
- Did you really know what you’re investing in?
- Did you have that little faith in the companies long-term potential?
- Did you do your research ? And…
- Are you In control of your emotions?
Last word of advice, never invest what you are not ready to lose. Valuations currently remain a question mark, so be smart and do not put all your eggs in one basket.
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Any views or opinions presented in this article are personal and shouldn’t be taken/used as professional advice as we are not qualified financial advisors.
Any statistics mentioned have all been linked to their respective documents together with their ownership.
Lastly, we would like to note that this article has no tie to our professional jobs and was conducted in our free time.