Getting a Grip on the Greenback

Some general strategies work, again, on average: To do well, an investor has to purchase items that are undervalued, or undesirable. That countermands our evolved tendency to get useful information from others. Succeeding today could mean going against our impulse to discount the future. Going against conventional wisdom requires a deep understanding that emotions can be our financial enemy. Refusing to give in to convention requires rational vigilance and disputing the intuitive idea that following the herd is safe.

Now, where's that letter opener?

Overcoming Your (Worst) Instincts

You don't have to be in the stock market to apply emotionally sound financial lessons.

• Beware of the tendency to put too much weight on an occurrence that just happened, or the need for immediate returns.
• You can refuse the impulse to follow the crowd and to automatically value what others value.
• Be cautious of high-stakes gambling and of taking big financial risks. Such moves require a level of experience most of us get only through serious study.
• Before a major purchase, ask yourself, "What is my goal and what is the value of this item to me with respect to my goal?"