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Summary

Your investment choices are affected by your mood. A good mood fosters optimism. However, people tend to misattribute the source of the happiness (like sunshine) to the investment decision. When you are optimistic, you tend to conduct less analytical analysis and take more risk. As a consequence, optimists end up buying into stocks and markets that are overvalued and bound for trouble. On the other hand, being in a bad mood causes the investor to be more critical and analytical. These traits help the investor avoid many blunders. So, in investing, it is better to worry than to be happy.


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