Emotional Investment.

There is a field in finance called emotional investing which means using feelings rather than logic in making investment decisions. I will briefly talk about it later, but I would like to focus more on the psychological emotional investment which is – “Emotional ‘investment’ in a subject is the degree to which emotions are evoked when the subject is encountered. Things in which we can invest include: Relationships with others. Ideas and ideologies.”

Viktor Frankl in his best seller Man’s Search For meaning talks about two instances of emotional investment which end up in tragedy. The first is of a man who gets a dream where he hears that he will be free from the concentration camp by the end of the month and perks up. When there is no sign of freedom at the end of the month, he dies. Similarly, other inmates imagine that Christmas will bring about their freedom and before the new year they will be free. They too die of disappointment.

On the other hand, Frankl observing such behaviour keeps his hopes alive with the single thought that he will one day write a book about his experiences and that one thought keeps him going till his release.

What better examples for emotional investment in ideas that can lead either to negative or positive results?

In the Indian system of Personality Analysis, there are three traits in all human beings called, Satvaguna, Rajoguna and tamoguna. All of us have all three in us except that the degree to which they predominate differs from individual to individual. I flatter myself that I am the Satvik type.

Some years ago, I had an opportunity to undergo the Myers Briggs personality analysis and I was given this analysis about my personality type:

Extraverted Sensing Thinking Judging

• Realistic, outgoing, systematic, dependable
• Dignified, strong-willed, and principled
• Extremely loyal to family, community, and country
• Great strategist and outstanding “game” player
• Respects tradition and order
• Highly ethical, hardworking, dedicated, and honest
• Lives in the observable “real world” and focuses on what is practical
• Extremely organized with difficulty dealing with uncertainties
• Responsible and would rather plan before acting.

In the Indian system of personality analysis, I flatter myself that I fall into the Satvic type.

My Yogic analysis and the MB analysis gel well and I can say that I am a well adjusted personality with just enough emotional investment in what matters and not greatly involved in the negative aspects of such investments.

Now, coming to the financial emotional investment aspect of this topic, I had made some foolish investments based on emotion rather than logic and lost a packet in the bargain. For instance, in a horse race, I bet on a horse named after my late wife and that horse came last! Similarly I invested in an IPO of a company named after a favourite deity and that company went into liquidation in just three years. After that experience, I have withdrawn from all kinds of financial speculative activities and now live a comfortable if somewhat placid life.

This is my take on this week’s Friday 5 On 1 blog post topic. The other four bloggers who write on the same topic every Friday are Sanjana, PadmumShackman and Conrad.  This week’s topic was suggested by Padmum. Please do go over to their respective blogs to see what they have to say on the topic. Thank you.

10 thoughts on “Emotional Investment.”

  1. I think we emotionally invest in others. Take marriages and other relationships. And often they can go t**s up so poor investment, or life experience.

    We learn more from emotional experience going south as it hurts more.

    I’ve recovered far more quickly from financial investment gone south and I had many but learned.

    XO
    WWW

  2. did something daft like this – after my separation monetary final was made – never saw any return other than about $500 one year x installments. it taught me a lot of things!
    recently x-dh was talking about being broke, a person who knows where my share ended up said “what did he do with his?” …. I have no idea!
    Catherine de Seton recently posted..Tuesday April 17, 1951…

  3. I would say emotional investment means having a passionate interest in something or someone, not necessarily for any assumed reward, just because there’s something especially attractive about them. Emotional investment may defy all reason and common sense, and may as you say end in disaster. But it’s what leads people to join cults, develop absurd beliefs and be blindly loyal to someone even when they’ve acted appallingly.

  4. “What better examples for emotional investment in ideas that can lead either to negative or positive results?”

    Well, your question above is interesting to me.
    Smile –> will get more positive results.
    Surly face –> will get more negative results.
    Probably, that’s long term emotional investment.

    I am thinking about Wisewebwoman’s comments.
    I have done emotional investment to a girl to get love, children, and my little family.
    Smile…

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