Why EQ?
The Investor’s Emotional Quotient
Buying stocks is one of the rare occasions where people view something as more valuable because it costs them more. For example, if we showed you a beautiful three-bedroom house today that was on the market for $200k, you might fall in love with it—but if the price increased to $300k, would you love it more or less? (Usually, the answer is less; you’re getting less for your money.) Only with investments do people reverse this way of thinking—a stock price increases and investors believe it to be more valuable, more worthy of their hard-earned money—but that’s not always the whole truth.
Studies have shown that it’s not the quality of a certain investment or the return it gets that determines the investor’s long-term outcome—it’s the investor’s behavior. Purchasing stock because the price increased isn’t a strategic decision; it’s following confirmation bias. Consequently, those investors who buy when prices go up will often sell when they drop out of fear of greater loss—forfeiting their opportunity to see future gains. In short, they buy into investment performance without owning the process.
At EQ Wealth Advisors, we’re here to help you make smarter investment decisions. We teach clients how to own the performance process and bridge the gap between emotional and logical decisions about money. Our firm is so named because we help investors manage their emotional quotient—so you can make wise, strategic decisions that have a lasting, positive impact on your goals.