Many people argue that human instinct plays a crucial role when it comes to making an informed investment decision. In my opinion, it would be wrong to because intuitive feelings may serve as a poor guide and an unreliable method as well as trigger time-consuming and costly decisions.
To begin with, human intuition is often considered a poor guide to tackling risk in business due to its inherent biases and limitations. The fact is that human instinct is prone to emotional biases, which means that they estimate risks based on their own individual feelings. One example of this negative effect is being over – optimistic. This overconfidence can result in excessive risk-taking and a failure to adequately consider potential downsides. This is illustrated by the investors’ behaviours in the dot-com bubble in the late 1990s. They were confident in the prospectd of technology companies and poured investment into new vetures without fully assessing their true value. When the bubble is burst, many investors suffered from substantial losses. Thus, relying sole on inner instinct is not an appropriate approach when it comes to managing risks in investment.
Moreover, it seems to be an unreliable method to use human intuition when making decision or evaluating risk fators. Obviously, our instinct is based on our personal experiences, knowledge and limited information while investing successfully requires a comprehensive understanding of the financial market, economic factors and other relavant data. In additional, human intuition hardly provide any anticipation of details and trends happening on the market better than accurate analytical tools or research in identifying risks. It comes to a conclusion that……utilizing data-driven and analytical approaches, rather than relying on human intuition, is essential for …making …sound investment decisions.
More importantly, investors are subjected to time-consuming and costly due to regretting past decisions. In the stock market, they often make irrational decisions driven by the inherent human characteristic of fear of failure. They persistently avoid terminating failed projects as they struggle to admit their mistakes.
In conclusion, it seems to me that human intuition is not a feasible measure because it costs time and money. It is advisable that investors should strike a balance between small decisions and priority ones and not regret past decisions.