Let it Go
“Let it go, let it go, turn away and slam the door.” As an adult male, I’ve watched Disney’s Frozen way too many times thanks to my daughter. I find myself echoing Elsa’s song on many occasions. “Just let it go Kevin.” Letting things go is very difficult for all of us. That’s because we all suffer from the big “E” word, emotions. Our emotions get us attached to artifacts, beliefs, sports teams, etc. Many are things we should let go of because they no longer provide any value.
The idea for this entry came to me earlier as I was moving a few items since we are re-arranging our home. After loading the truck, I noticed a stroller sitting in the garage. Our kids are about to be seven and four in a few months, yet we still have a stroller. I called my wife and said, “I’m donating the stroller too.” She was taken aback and stated, “we might need it.” Dumbfoundedly, I retorted “need for who?!” After a brief exchange she relented and agreed. I understand her emotional attachment. The stroller is sentimental because removing it admits the kids are growing up. Heck, as I am writing I recollected one item that needs to be trashed. I rose from my desk to verify (yes there it is) we still have a diaper genie outside of my son’s room. I couldn’t tell you the last time he wore a diaper. While the diaper genie and stroller serve no value to us now, they still generate emotional attachments due to sentimental value. It’s why I still have my homemade Father’s Day cards displayed. I’m emotionally attached even though they are just cluttering my desk.
Add finances and/or money to the equation and our emotions kick into overdrive. Investors hold on to an investment way longer than they should simply due to their emotional attachment. Every investment may initially have a valid reason for holding but when conditions change, the only thing keeping people from walking away is the psychological aspect. It’s like a poker player raising pre-flop with a pair of kings then being met with an ace on the flop. They’ll call down a losing hand simply due to the emotional attachment of the value of the hand before the flop.
The reasons are many. An investor may hold on to their company’s stock due to the years they worked for the employer. Another may hold on to a stock because they inherited it from a loved one. An investor may hold on to a stock that is down because they emotionally do not want to admit to being wrong or accepting the loss. Or they “believe” this is a good company and they “think” it will do well. We have to make sure the emotional attachment does not interfere with making rational decisions. Holding on to an investment that is losing money due to emotional reasons is like holding on to a diaper genie. Neither provide any value, so think Elsa and “let it go.”
Photo credit: https://www.cinemablend.com/news/2474140/4-great-frozen-songs-that-arent-let-it-go
