Having a curious mind is good for business Martin Hawes
Thinks we shouldn’t be afraid to dig more deeply.
One of the greatest of human characteristics is curiosity. It seems to me that the propensity to delve into what is happening (and why) is perhaps the most useful and valuable personality trait that we have.
With enough curiosity, we can get to the bottom of just about any issue and understand the things we need.
This is certainly so with finances. An attitude of curiosity means that you strive to understand how money works and what you should be doing,
Curiosity means asking questions and gets us to learn to listen. It also stops us giving up: we keep asking questions until we understand.
This is especially valuable when selecting investments. The selection of the right shares or bonds requires a thorough understanding.
That comes from asking the right questions, which is driven by a desire to know. If you are curious enough about the shares or bonds that you might own, you will naturally take a deep dive into research.
For example, if you are thinking of buying a company’s shares and come at the purchase curious about what makes the company profitable, you will keep questioning until you understand.
You may come to understand that you should not touch the company with a barge pole, but that understanding is better than buying in ignorance.
Curiosity extends beyond a desire to know about finances or particular companies: you should also be curious about yourself and your own behaviour.
This involves that relatively new and very interesting field of behavioural finance.
Curiosity means that if we do something that failed, we ask ourselves why we did it.
You might ask why you held on to a poorly performing share before it took a major dive.
Many people hold on to their poor performers, telling themselves that they will sell when it come back to its purchase price.
A rational person would recognise that they have bought a poor investment, recover whatever they can out and get it into something good.
But many of us anchor ourselves to the dud investment, hoping against hope that we will get our money back from something we know to be an investment dog.
If you are curious enough, you will start to ask yourself why you held on and then make sure that you never do it again.
Martin Hawes is the chair of the Summer KiwiSaver Investment Committee.
The Summer KiwiSaver Scheme is managed by Forsyth Barr Investment Management Ltd.
You can obtain the scheme’s product disclosure statement and further information about the scheme on its website at www.summer.co.nz.
Hawes is an Authorised Financial Adviser and a disclosure statement is available from him on request and free of charge.