The brain running our investment decisions was not built for investing

The brain running our investment decisions was not built for investing.

It was built for survival. For 200,000 years, the rule was simple: if something looks dangerous, act immediately. That instinct kept our ancestors alive. Today, it makes us sell when prices drop and follow the crowd when fear spreads.

Right now, oil prices have jumped 60% in a single month after conflict erupted around the Strait of Hormuz, the channel that moves 20% of the world's oil. And people are moving money to cash as fast as they can.

With recent volatility in the markets, I keep catching myself wanting to do the same thing.

Psychologists call this loss aversion. Losing $1,000 feels twice as painful as gaining $1,000 feels good. So when a portfolio drops, the brain screams emergency, even when nothing about our actual lives has changed.

We fear the danger we can see. We ignore the one we can't.

Inflation quietly erodes cash savings every single month. No alarm goes off. No red number flashes. But watch a portfolio drop 8% and every instinct says: do something. Anything.

Salience bias. Panic for visible losses, silence for invisible ones. It costs us real money, quietly, for years.

Then the crowd makes it worse.

When everyone around us is selling, the brain reads that as confirmation that selling is correct. Behavioral economists call this herd behavior, the same instinct that once told our ancestors if everyone is running, run. In March 2020, the ones who noticed this in themselves and stayed put didn't just recover. They tripled their money by March 2026. Not because they had better information. Because they caught the reaction before it became a decision.

Most of us were handed financial tools without ever being shown the operating system running underneath. Once we see it, the decisions change. Not because we stop feeling the fear. Because we finally understand what it is.

We have 1% swings up and down each day. What's your brain telling you to do — and do you trust it?