How One Bad Investment Experience Can Last a Lifetime
Perhaps one of the most damaging investment behaviors is going through a fearful experience of loss and havin that trauma permantly scar the investor. But there is a biological and brain-based reason for this. Now like all responses to traumatic experiences, some individulas are more susceptible than others. That would be important for advisors to know. Like in all cases — look at family history for indicators.
- Fear can literally change our perception. Fear doesn’t tend to stay restricted to one type of scary experience.
- In the case of fear, the brain seems to say “better safe than sorry.”
- Fear changes not only our reactions to experiences, but also our perceptions of the world itself.
The new research, explore this “generalization” of fear and its connection with learning. Emotional experience typically improves learning — that’s why you remember your first love better than first grade.
- Rather than fine-tuning the connections you make while under the influence of emotion
- Fear instead reduces your ability to discriminate between potential threats, impairing learning about them
- It suggests that people with PTSD may literally unable to distinguish perceptually between threatening and non-threatening situations; the same may be true in other anxiety disorders.
- Some theories of autism also suggest that people with the disorder are more likely than non-autistic people to generalize fear and to learn to fear situations more rapidly.