Are you a “numbers person” or more the “artsy type?” According to the left-brain right-brain dominance theory, one hemisphere of the brain is more dominant, and this, in turn, determines the way you think, how you feel, and what you find interesting. It’s also largely a myth.
It is true that each hemisphere activates the opposite side of the body but there is little medical evidence to support that one side of the brain is responsible for our personality or thinking patterns. In reality, the different sides of the brain work together, simultaneously. Critics believe this classification of abilities is dangerous and leads people to believe that, due to genetics, they are either fill-in-the-blank inclined or not. A related, and harmful, myth is investing is only for the wealthy, the mathematically-inclined, or those with a passion for studying finance.
A wonderful thing about the world of investing is that no matter your interests or the way you approach a problem, there is a niche for you. Left-brain, right-brain, or whole-brain—it doesn’t matter, investing can be interesting and approachable to everyone.
Characteristics often associated with the right-side of the brain include decision-making ruled by intuition and emotion; the ability to read into others’ emotions; a fondness for spontaneity; and a preference for “big picture” thinking. “Right-brained” individuals are drawn to music, visual art, fiction, and contemplating the symbolism in Blade Runner.
But it can be hard to differentiate between “right brained” traits being the cause versus the effect of this behaviour. For example, people who really like art are more likely to go into English or the fine arts and have thus been conditioned to think abstractly and creatively. One side of the brain does not determine your abilities. However, it is a tidy way to group people based on what interests them and the ways they think. And so, let’s delve into the stereotype of a “right-brained” individual.
Conversely, a leftist would base their decisions on logic; default to level-headedness over emotional impulses; believe in itineraries; find joy in the details; and are more interested in the mechanics of Blade Runner’s special effects.
So with those traits, what aspects of investing would right-brained individuals find particularly interesting or be well-suited for?
- Holistic-thinking is a trademark of the right-brained. It involves looking at the “big picture” and recognizing large-scale patterns rather than focusing on the minutia. “Big picture” thinking is particularly well-suited for the intangible elements of fundamental analysis—one of the two major schools of investing analysis. Fundamental analysis involves examining the underlying forces that affect the well-being of the economy, industries, and company, such as evaluating management, competitive advantage, how customers feel about a brand, industry trends, and much more.
- Intuition and its role in stock trading has been idealised in TV shows like “Billions” in which hedge fund managers rely on their gut to make seven-figure decisions. It seems the exaggeration of Hollywood writers, yet, many professional traders use intuition. Making quick decisions based on intuition isn’t some general feeling in the gut, rather, it is pattern recognition that comes from watching the same companies’ every move, over time. The right-brained affinities for visualization and pattern-recognition add up to intuition, and it can prove useful for experienced investors.
- Sensitivity is having an appreciation and understanding of another’s feelings and can be especially helpful if you’re able to use this understanding to inform your decisions—like in the case of herd mentality. Herd mentality describes our natural tendency to conform to the behaviour of the group and has many times been the reason a stock market gains momentum, either in its rise or fall. The typical examples are stock market bubbles and slumps, when rumors or news stories can cause an exponential rise or fall as more and more people follow the herd and perpetuate the positive or negative cycle. In order to not follow the herd, you have to be able to identify the herd, which requires a great deal of sensitivity and the ability to read into the emotions of others.
“Right-brained” individuals’ count intuition and sensitivity as a strength. However, emotional investing can be a bit of a catch-22. In particular, letting certain emotions guide your decision-making in the stock market. Is Your Cat a Better Investor?, an article that explores the role biases and emotions play in our investing, describes how “as our prehistoric brains evolved, we developed rules of thumb. Rules that streamline our thinking and help us survive and thrive as a species.” These rules of thumb leave us open to emotional influence in our decisions, hindering our thinking without our knowing. A common example is holding onto a losing stock too long in hopes of it recovering, and assuming every stock eventually bounces back.
South African scientist, Lyall Watson, has a quote as profound as it is apt, “If the brain were so simple we could easily understand it, we would be so simple we couldn’t.” The brain is an enigma, and as far as science can tell we’re not born more mathematically or artistically inclined. So if you’ve long considered yourself “right-brained,” don’t be afraid to crunch the numbers; you weren’t born to fear or be confused by them. And if you thought investing was only for those with a natural talent for it, then hopefully you now recognize the many facets of investing and where you too can thrive.
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