Force for thought — 01.11.24

To Have and To Hold

How do you hold onto a good thing and not let it go before it has time to work its magic? By mobilising a method that works. No one is insulated from the challenges of sticking with something promising — not a diet, nor an exercise regimen, or even a first date — the moment it becomes uncomfortable and hard. Why should investing be any different?

We’ve collected more than four million data points that demonstrate how a particular methodological communication enables investors to hold on for the ride. The proof stretches beyond investing: our ability to hold on when we least want to — in order to withstand things that can cause our undoing — has application everywhere. Each week, we’ll show how and why a mechanism for holding on, in investing and in life, is so powerful.

Zooming in

In 2021, Simone Biles was on course to change the history of gymnastics. The celebrated gymnast and multi-medallist had qualified for all four final events in the Tokyo Olympics; Biles had the potential to become the first woman to win consecutive titles in the all-around in 53 years. Her past was a promising precedent — Biles hadn’t lost an all-around since 2013. Then suddenly, she withdrew from the competition. Why? Due to the ‘twisties’. In other words, she experienced a disconnect between mind and body, the former failing the latter when it mattered most.

So, why is this relevant in the realm of investing? Perhaps surprisingly, Biles’s withdrawal is extremely instructive for our investor journeys. Though she possesses a rare — and perhaps superhuman — set of skills, talent and proven credibility, these were no match for a shaky mindset. Furthermore, in spite of devotion to her practice (consider that Biles put in many more hours at the gym than most individuals can expend on a single pursuit), her body ultimately surrendered to her mind. Why should we be immune from buckling under pressure? After all, the environment of the stock market is similarly hostile; business or academic bona fides will prove fruitless without a rock-solid temperament. To protect against capitulating, investors need mechanisms — like Force500’s routine, uplifting and positive feedback system — to keep their temperaments in tact at the most climactic moments. Otherwise, any arena in which we have an opportunity to shine — be it in mid-air or in the market — may serve to expose our biggest fragilities instead.

To Have on Hand

Ever heard of an amygdala hijack? In essence, the amygdala is the brain’s hub to process emotions. But what happens when we’re faced with an overwhelming threat, like an unexpected downturn in the stock market? Our amygdala can become overactive such that it impedes on our cortex — the rational, problem-solving part of the brain — compromising an optimal reaction. The result? Amygdala hijacks may be sudden and brief but their repercussions are much broader, which is why conditioning our emotions, and making better decisions, go hand in hand.