Investing triggers all our character flaws. People pleasers have trouble with many investment scenarios. People pleasing is conforming to another person’s will at the expense of our own self-interest. We feel if we say no to their requests, they will not like us or will not respect us as investors.
Profits are made in the sale of all investment products. Someone is always interested in getting you to buy. Stockbrokers want commissions, no-load mutual funds want expenses, banks want interest rate spreads on CDs, Realtors want commissions. A people pleaser often buys investment products to make someone else happy and later finds himself miserable.
People other than salespeople can trigger people pleasing. Many people use their parents’ broker to make their parents happy even if the broker turns out to be a stock churner. Even on discovering the truth, they continue to use the broker so their parents will not find out the broker is a crook and be alarmed. Employees commonly buy employer stock to please the boss even if the stock is a poor investment or renders their portfolio undiversified.
During the tech bubble, many tech stocks were purchased to show other tech maniacs that you were part of the group.
Irrational buying is not limited to people pleasing. Some investments are purchased on a mere impulse. No one is pleased, including the purchaser. An impulse is satisfied and that is all.
Before online trading, there were few investments that could trigger impulse buying. Today, any investment that can be bought and sold on the Internet is subject to impulse buying. Stocks and mutual funds are the most common impulse buys. Real estate requires weeks, if not months, and large cash outlays. Impulse buying is nearly impossible with real estate. A pattern of impulse buying is a sign of self-destructive behavior. If you have made one or two impulse buys, look for investments in that cannot be purchased online. If you can count more than 10 times when you have bought investments on impulse, you need additional help. Call a therapist.