Are you willing to experience some pain to get a lot of pleasure?

As investors, we all love the euphoria that comes from watching our investments grow.

But from time to time, markets give back some of the gains.

For many investors the pain from loss is greater than the pleasure from gains.

Over time, markets have always recovered and gone on to make new highs. So why is it still so painful when we experience a decline?

I believe it’s due to a survival instinct our ancient ancestors developed many years ago called the fight or flight response. It’s a biological defense mechanism. We developed it to save ourselves from being eaten by giant mastodons.  So while we’re no longer being chased by giant mastodons, I believe the same instincts are triggered when we look at an account statement that has declined from a recent high.

Yet we know that the markets have always recovered from prior declines and gone on to reach new highs. So why is it still always so painful? Blame it on the ancient Caveman in all of us.

Disclosure: No Cavemen or Mastedons were harmed in the filming of this video