Hype Type Revealer - See your Rational tips and tricks

Sometimes we might make high-risk investments that are driven by our emotions and are not aimed at improving our medium or long-term finances. Being a rational investor isn’t about putting your money into something just because it is new or exciting and promising quick wins, or because your gut tells you to. It’s about recognising when we might be investing emotionally and taking the time to think it through.  

Keeping your cool even when others can’t 

Investing for your future is a good thing, and it should feel good – but making decisions based on emotion isn’t likely be the best route for your finances.  

And that’s what sentiment hype’s all about – our emotions can whip up excitement about an investment, and sometimes friends or influencers might even add to its appeal. By glamourising and normalising risky investments, sentiment hype can make us think that being an investor means we have to invest in high-risk products.   

Seeing through the sentiment hype 

When you do invest, remember to think about the risks as well as the opportunities. And to think properly about the risks, it’s important to take time to reflect, rather than be rushed into hasty decisions. 

Reflecting on an investment opportunity before you purchase is a difficult skill, but one that expert investors will master. As a rule of thumb, between finishing your research and making the investment, take 24 hours to reflect on whether it is right for you.   

Looking beyond any glamourising of the ‘opportunity’ can help you to think about what’s really on offer to you, rather than how it’s being presented. So, take all the time you need to decide, rather than responding to peer pressure. After all, it’s your money that’s at stake – so when the hype fades, any losses will 100% be on you. 

Personal Pointers 

Drop: Your reliance on instincts. They don’t make for good investment decisions. But data does. Do your research.   

Pick up: Wait 24 hours between finishing your research and making the investment to help ensure it is right for you.