Let me make an important distinction. The Wall Street Psychologist’s Gyroscope is not an investment philosophy. I am not an investment adviser, nor am I some financial guru. I do not even preach caution in investment practices for the sole sake of being conservative.
Risk is good, when applied for the right reasons. Risk based on the right interpretation of market fundamentals can make you successful. Risk driven by insecurity and a willingness to succumb to herd mentality to catch the latest wave can destroy entire markets; even lay waste to global economies.
I am both student and teacher of the behavioral and emotional patterns of financial services professionals. The simple fact is that crises do not happen suddenly. They build over the course of time, slowly gathering momentum until they crash in violent crescendo that cascades across the globe, ensnaring billions of people in their wake.
The warning signs are always there. They always are. As I counsel patients, you do not need 20/20 hindsight to instill in yourself the discipline that will remove the psychological blinders that stifle preventative measures.