In a Falling Economy, Trust Your Gut Or Reason?
It happened to me in the early part of this century. The stock market had been going up for quite some time and people around me were all telling me to "get in." Even though I had a gut feeling that the ball had to drop at some point and the higher the market goes, the closer we are to it dropping....I got in. It seemed reasonable in some way at the time. It only took a few months for the other shoe to drop and as it did I continued to put more in, listening to everyone telling me what a good deal the stocks were at now.
I wasn't alone then and this seems to have repeated itself in our subprime mortgage debacle as a recent article in Fast Company magazine points out.
The moral of the story...don't take financial advice from me? While that might be one moral, that's not the one I'm getting at.
What is it about our preference over our reason versus going with our gut? Why are we so skeptical of our guts and is there a way to get back in touch with them (or to go back in time and get back in touch with it?)
Interestingly enough, Chen-Bo Zhong out of the University of Toronto conducted experiments comparing someone's decision to cheat or be fair to others based on using reason or their gut. If you cheated, there was a reward given at the expense of the other person. When the participants were encouraged to use their rational minds and ignore their emotions, 69% chose to cheat. When they were encouraged to use their guts, only 27% cheated. Hmmmm....
It also seems that people are skeptical of those who rely on their emotions. When people were given an option of who they would rather interact with, a person relying on their rational mind versus their emotional mind, 75% chose the rational mind.
Now, this isn't to say that relying on your feelings is better than relying on your rational mind or vice versa. This is just to highlight what our underlying preferences are for the rational mind.
We know that there is no real separation between our rational mind and our emotions. Is there a way to be aware of both, without negating the other?
Would a little more guts and feelings have made a difference in the unethical behavior that has occurred over the past decade in the financial industry?
Sometimes it's important to cultivate an awareness and defense of our feelings.