A reminder from Ben Carlson today about why sometimes it’s best to ignore the crowd. You can catch a whiff of its emotion and become contaminated with it yourself.
And I don’t just mean in the form of reading the wrong market commentary, which can be deadly to your portfolio and your future in its own right. I’m talking about a physical transfer of fear from one person to many…
It’s possible this level of calm is contagious, but based on another test, fear certainly is. Researchers took sweat samples from first-time skydivers as they hurtled towards the earth. The samples were then used to test the reaction other people would have to it when they smelled the fear-soaked sweat (I know, kind of gross).
Subjects were placed in an MRI machine to smell the sweat samples. They discovered the fear from the skydivers was actually transferred to these subjects as the parts of the brain that emit panic lit up on the MRI results. Emotional stress can be contagious which provides a nice explanation of the herd mentality.
Watch who you talk to about investing. Don’t get caught feeling some type of way just because they are.