Seinfeld fans love George Costanza’s irrational antics, partly because we see parts of ourselves in his behavior. Although George never intended to give financial advice, his quirks reveal important truths about human behavior and investing.
The Amygdala – Our “Fear Center”
In Season 5, Episode 20, George is at a birthday party when he suddenly notices a fire. Panic kicks in. He rushes toward the door, pushing past an elderly woman and even pulling a child away from the exit. Rational George disappears the moment fear takes over. That’s the amygdala at work, the part of our brain that triggers fight-or-flight responses.
For investors, it’s the same instinct that tempts us to sell low when markets decline. We saw this in April, when a surprise tariff announcement caused a sharp selloff. Many investors followed their natural urge and sold. No one includes “sell low” in their investment plan, yet that’s exactly what happened. This wasn’t about strategy; it was biology. And because this reaction is hardwired, it requires preparation and discipline to overcome.
Opposite George
In Season 5, Episode 22, George has an epiphany: every instinct he’s ever had is wrong. So, he decides to do the opposite of his natural impulses and suddenly finds success.
I’m not suggesting we do the opposite of every instinct or initial thought. However, we need to pause, reflect, and learn from times when our instincts have misled us. With markets at high valuations and uncertainty about tariffs and the economy, a bit of “Opposite George” thinking — questioning our gut reactions — can be a strong defense.
My Role
When the next downturn arrives, our instincts and amygdala will drive us toward impulsive actions. That’s why it’s crucial to prepare not only a financial plan but also a strategy for how you’ll respond when the unexpected occurs—whether it’s a crisis, a selloff, or unsettling headlines. That’s exactly why you have me!
My role is to help ensure your decisions stay thoughtful and deliberate, always aligned with your values. This is especially important when uncertainty is high, markets become noisy, and emotions run strong — which, as we know, happens almost monthly in investing.
Stay relentless,
Scott
© The Behavioral Finance Network