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Snap Judgment Summary

4 min read ⌚ 

Snap Judgment Summary

When to Trust Your Instincts, When to Ignore Them, and How to Avoid Making Big Mistakes with Your Money

How many times have you done something because “you had a feeling” about it? How many times have you heard other people explain their behavior in such ways?

Who Should Read “Snap Judgment”? And Why?

All people, no matter their professional position, place a significant amount of focus on their intuition whenever the time comes to make decisions. The results from such conduct are usually disastrous.

Behavioral economist and author David E. Adler studies the reasons behind this human behavior: making important decisions based on gut feelings, urges, habits or snap judgments instead of being more rational and using analytical reasoning.

Accordingly, it may prove especially useful to investors, managers and other executive decision-makers that need to change their thinking.

About David E. Adler

David E. Adler is a writer for Financial Planning and has published with Barron’s, the New Republic, and Psychology Today. He devotes his time to financial journalism, economics research, and television. In addition to Snap Judgement, he is also the co-editor of the anthology Understanding American Economic Decline.

“Snap Judgment Summary”

Intuition is an indivisible part of each human on this planet. Prehistoric humans, for example, completely trusted their instincts and made quick decisions in possibly dangerous situations, when their lives were at stake.

Humans also developed the capability to read social hints, analyze words, and differentiate between enemies and friends in a second. They can decipher language cues, vocal signals, and can discern each other’s moods. Gut instinct is quite valuable when it comes to social situations. However, it is not as useful when it comes to more complex cases.

Intuition may indeed work in simple scenarios. However, it will not be of any help when you are selecting the best retirement plan when you are assessing investments or deciding to enter a new market.

In fact, trusting instincts when you need to make a decision works against your best interests. People who are overly self-confident frequently make wrong choices. Their confidence blinds them and is not allowing them to see the whole picture of a particular situation. Also, they sometimes utilize wrong rules of thumb to simplify and understand complicated cases.

The way that people despise losses more than they like gains influences their decisions as well. They make an effort to stay away from mishaps, even to the degree of indulging in unsafe conduct.

Behavioral economics, which, pretty self-explanatory, includes both psychology and finance, finds that snappy judgments are useless for picking stocks. Stock buyers need to gain a deeper understanding of what inspires different investors and how they are probably going to act.

Wise investments are not significant on an individual premise only. They additionally secure the economy from the development of market bubbles that can harm the global and local markets. Feelings also confuse people and push them towards reckless decisions.

People will more likely burn through cash when they feel troubled than when they are at rest.

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