The Motley Fool

Choose your shares like you choose your partner – with your head and your heart

There is a whole raft of share market analytical tools available to you plus a number of ‘experts’ willing to offer their skills in evaluating your investment options.

But each of these tend to take a cold, pragmatic and clinical approach.

They crunch numbers, compare past performances and economic conditions. It’s hard to argue with these ‘facts’ – but as an investor, you are still a human being, complete with feelings, attitudes and emotions. There is an argument for reflecting these facts in your selection of shares to invest in.

Does it feel right? 

I’m not decrying the importance of sound share market analytics, but you also need to be personally comfortable with the choices you make.

Perhaps you are a person who is passionate about climate change and its impact on our world. Then investing in shares that involve mining of fossil fuels could present a real conflict of emotions for you.

While shares like BHP Group Limited (ASX: BHP) offer excellent financial stability and returns, their extensive involvement in the coal industry may not make you feel all that comfortable.

Alternatively, an investment in a renewable energy organisation like New Energy Solar Ltd (ASX: NEW) could prove to be both financially and emotionally rewarding as its products’ acceptance and application grow. They could prove to be of real value in the not too distant future.

Maybe you are keen to see our population achieve better attitudes towards their diets, exercise and general health. Then you may lean towards stocks that encourage this outcome like Viva Leisure Ltd (ASX: VVA), which is expanding its regional fitness centre interests. You may also opt to steer away from other market success stories like Domino’s Pizza Enterprises Ltd. (ASX: DMP).

As another example, while many of us enjoy the occasional alcoholic beverage, there are others among us who have a fundamental problem with the dependence a lot of Australians have on the ‘demon drink’.

Some investors could therefore be more comfortable with an investment in the A2 Milk Company Ltd (ASX: A2M) than they would be with another Australian icon – Treasury Wine Estates Ltd (ASX: TWE).

Like choosing your partner

There are many non-emotional reasons to choose a share to buy and these must be considered seriously, just as there are in your choice of a partner.

Yet you could be living with the shares you choose tomorrow for many years to come. Feeling happy and content in their company can create an emotional bonus on top of the good financial returns you’re looking for.

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Motley Fool contributor Gregory Butler has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Treasury Wine Estates Limited. The Motley Fool Australia has recommended Domino's Pizza Enterprises Limited and Viva Leisure Ltd. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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