By Anneli Knight
Intuition is a concept not often associated with the logical world of finance and investments. But once you have your facts straight, you might be surprised by how much you can benefit from following the deal that just 'feels good'.
Organisational psychologist Ben Palmer of human resources consultancy Genos International says intuition is the information we receive from our non-conscious brains, and is closely linked to our emotions.
“People who really take the time to stop and reflect on those emotions and what they mean tend to be called more intuitive and tend to harness the quality of intuition in their lives,” Palmer says.
“Most people have that story about having a sense of something, ‘It didn’t feel right’, but went ahead anyway and later regretted it, saying, ‘I wish I had listened to my gut feel’. It’s about our capacity to listen to our intuition to help us drive good decision making.”
A person may successfully call upon their intuition when determining the trustworthiness of a company’s board of directors, or the directors of a managed fund, or when purchasing property, Palmer says.
But while emotion is integral to intuition, too much of it can misguide.
“Too much emotion can sully cool, crisp rational thinking. Being overly optimistic or not being conscious of just how excited you might be about a particular investment can get in the way of making a good investment decision – you might not look for the faults as deeply as you normally would.”
But even this can be overcome with practice, through a process of fine-tuning your intuitive skills.
“The first step is to be conscious of the way you feel and to be asking yourself the question: ‘what valuable information is there in these feelings that I have, and how might that also potentially be limiting my ability to objectively make a decision about this investment?’ It is all about using an intelligent combination of the facts and logic of the information together with what your ‘gut feel’ and emotions are telling you. It’s being emotionally intelligent about how you make investments.”
Palmer says the most important relationship for many investors is with their financial adviser, so it is very important to listen to your intuition when selecting an adviser with which to work.
Sunshine Estivo is a values-based financial planner and co-founder of financial planning group Omniwealth. Estivo has previously run seminars on the idea of intuitive wealth and she encourages her clients to employ their intuition when developing their financial goals.
“So often people’s goals sound the same – it’s almost like they got them from society: ‘first I want to buy the home, then I want to upgrade the car, then upgrade the home’. You’ve really got to dig deep and find out what is really important for people – and that’s where intuition comes in.”
Estivo says it can be a difficult process for people – really nutting out what truly motivates them.
“People say to me, 'how do I know what I love doing?' Or 'how do I know what’s important?' I say: ‘Where do you spend your time, your energy and your money and that’s probably what you’re most passionate about.”
When someone tunes in to their deepest passions there’s a buzz of energy in the room, Estivo says.
When it comes to making investment decisions, Estivo agrees it should always be a two-step process.
“When people make an investment decision, it needs to make logical sense but it also has to feel good. I hear that all the time from my clients, ‘I’m happy to go ahead, it feels good, it feels right.’”