Money: not just numbers, but emotions. Find out how they affect your financial decisions

Capitalization is not only a science, it is an art in which emotions play an important role.

People often make decisions based on fear or greed, which can lead to serious financial losses. For example, during periods of market volatility, many people panic and sell without thinking about the long-term prospects. This behavior is due to the instinct of self-preservation, which leads people to avoid losses, even if it would be wrong.

On the other hand, greed can lead to taking excessive risks. When the market grows, people often become too confident and start using high-risk strategies without proper analysis. The desire for quick profits can lead to significant losses during a market correction. Understanding these emotions and their impact on behavior is a key aspect of effective money management.

Minimize the impact of emotions on decision-making. It is important to develop a clear strategy and stick to it. Creating a diversified portfolio and setting specific goals in advance will help reduce stress and avoid impulsive decisions.