What’s the problem?

Being an investor isn’t just about understanding markets—it’s about understanding yourself. And that, as it turns out, is much harder. Markets are unpredictable, full of noise, hype, and the occasional bout of outright lunacy. But the real battle isn’t with the S&P 500 or Bitcoin’s wild swings—it’s with our own brains.

At any given moment, we’re being pulled in two directions. On one side, there’s the intuitive, fast-acting part of our mind—let’s call it the “X system”—which thrives on gut feelings, rules of thumb, and the kind of snap judgments that worked well when we were hunting for food but less so when we’re deciding whether to chase the latest stock frenzy. It’s powered by the amygdala, the ancient risk-and-fear-processing unit, and the nucleus accumbens, our internal casino, lighting up at the prospect of reward.

‘The investor’s chief problem – and even his worst enemy – is likely to be himself.’ 

– Benjamin Graham, (Graham and Dodd, 1996)

Then there’s the “C system,” the slow, rational, evidence-based side. The problem? It’s easily overpowered. We like to think we’re logical creatures, carefully weighing facts and risks before making a move. But in reality, the X system is often in charge, especially when things get complicated—like investing. When information is incomplete, stress is high, and goals are at odds (take no risk today, risk failure tomorrow), the impulsive brain takes the wheel. And when that happens, we start chasing trends, mistaking noise for signals, and convincing ourselves that this time—this time—things are different.

Why do I need help?

We like to think we’re rational investors. In reality, we’re just emotional creatures wearing smart clothes, constantly tricked by our own brains. Take the latest obsessions with Bitcoin and gold. Prices go up, and suddenly, everyone’s a genius for jumping in early. Prices go down, and those same people talk about “buying the dip.” This isn’t investing—it’s recency bias. We see what just happened and assume it’s the start of a trend.

Then there’s overconfidence, the most dangerous drug in finance. We convince ourselves we can spot patterns where none exist, like a gambler seeing “hot numbers” on a roulette wheel. Worse, we look back at past market moves and think, Well, that was obvious!—as if predicting the future is as easy as explaining the past. It’s not. That’s hindsight bias at work.

And let’s talk about anchoring. Say the stock market doubles over a decade, then drops 15% in a few months. What do most investors fixate on? The high point. They feel like they’ve lost money, even though they’ve actually doubled it. The better perspective? Start from the beginning, not the peak. But our brains don’t work that way.

Familiarity bias is another classic mistake. Investors stick to what they know—companies in their home market—because it feels safe. But feelings aren’t facts. The UK stock market, for example, makes up just 4% of global equity market capitalization, yet plenty of investors are still clinging to it like it’s the only game in town.

So, what do we do?

Step one: recognise that your brain is wired to mess with you. Step two: slow down. Give the rational mind time to catch up before your instinctive one runs away with your portfolio. Step three: call your adviser.  Because in investing, as in life, the first impulse is often the worst one, and the third is often the best.

The trick is to slow your brain down, give your rational side time to catch up, and actually think. A good way to do that? Write things down. The moment you feel the urge to make a move, call us. If you’re still wavering, grab a pen and try asking yourself a few hard questions:

• Are you reacting to recent market noise? Gold shoots up, Bitcoin surges, and suddenly, it feels like the train is leaving without you. Is this FOMO talking, or is there actual logic behind your move?
• Does this decision contradict the investment approach you already believed in? If so, what changed?
• Do you really think you know something that the market’s brightest minds have missed? Keep in mind, most professional fund managers can’t even beat the market.
• Are you seeing a pattern? Because here’s the thing—markets love to make random movements look like trends. The trend is not your friend.
• Are you guilty of hindsight bias—thinking that because something now seems obvious in retrospect, it was actually predictable all along? If so, you might as well grab a crystal ball and start a fortune-telling business.
• Are you sticking with what feels safe and familiar instead of what actually makes sense? Be wary of the comfort zone—it’s a terrible place to compound wealth.
• Are you dazzled by the returns but blind to the risks? If an opportunity looks too good, chances are you just haven’t spotted the downside yet.

At the end of the day, bad investment decisions aren’t just abstract mistakes—they cost real money, real time, and real opportunities. The less we let our emotions hijack our decisions, the better shot we have at keeping our retirement intact, our investments on track, and our sanity in check.

So, take a breath. Stick to the plan. Ignore the noise. Because your rational brain doesn’t just need a seat at the table—it needs to be running the show.