What is integrated investment decision-making? It is integrating information from analysis, emotion, intuition, and body into our investment decisions.
Why do this? Integrated decisions lead to better, optimized outcomes. I’ve encountered many stories where an investor’s decision was led by one input over the others.
For example, an investor’s analysis suggested an opportunity was not a good idea for her, but she felt strongly about helping the entrepreneur – to the point of obligation or guilt. She made the investment and from a financial and analytical perspective, it did not go well. However, on the other hand, investment decisions led by analysis may create significant financial gains from an analytical perspective, but the outcomes leave you wanting more emotionally (this has given rise to the field of impact investing, where people are trying to invest in accordance with their values and create outcomes that please their analytical and emotional side).
And we most certainly need intuition to guide our decisions. Investing is inherently a future-oriented activity and requires forward-looking decisions. But how do you make a decision about something that has not yet happened? You need intuition to guide you through the unknowns and uncertainty.
Our bodies give us signals and tell us a lot about opportunities to pursue or avoid because our physiology responds to stress, fear, joy, and pleasure. We need to get better at identifying and understanding the physical signals and what they mean.