Courage is literally at the heart of taking risk and making decisions.
Courage originates from the Old French word “corage”, itself derived from “cœur”, which our school French lessons reminds us, means heart. If we go further back, the word “heart” was used to describe the place from where we draw our emotions, spirit, and inner strength.
Originally, courage would have meant something closer to “what is in your heart” – your innermost feelings, convictions, and character. By the Middle Ages, “corage” in Old French and early English began to take on a more specific sense: bravery, boldness, and the ability to face danger or difficulty. This shift reflects the idea that true bravery comes from deep inner resolve rather than outward force.
That historical meaning still shapes how we understand courage today. When we say someone has courage, we’re not saying they’re fearless, we’re saying they act from the heart despite fear. In a way, the etymology captures something profound. Courage isn’t about eliminating fear, but more about letting your deeper values and convictions guide your actions even when fear is present.
In the world of investing numbers, charts, and data often take centre stage. Yet beneath every successful investment story lies a less tangible – but equally critical – factor: courage. The willingness to take calculated risks, to act in the face of uncertainty, and to endure temporary discomfort is what separates average investors from exceptional ones.
At its core, investing is an exercise in uncertainty. No matter how sophisticated the analysis or how experienced the investor, the future remains unpredictable. Markets fluctuate, economies shift, and as we have seen over the last few weeks unforeseen events can reshape entire economies and industries overnight.
In such an environment, playing safe may feel the right thing to do, but it often leads to missed opportunities. How often have we seen sharp market falls rebound over the short term. Much of the gains investors make are made in the recovery after the fall. Risk-taking in investing does not mean acting recklessly. Rather, it involves making informed decisions backed by robust evidence.
Arguably, avoiding risk is impossible as even playing it safe has risk attached. We have seen investors switch to cash during a market downturn, waiting for “certainty” before investing again. Ironically, this hesitation often results in buying back into the market at higher prices, consolidating the losses, and missing the recovery phase where gains are strongest.
Courage and a growing understanding of investment risk helps clients accept the reality that short-term volatility will happen at some point. We encourage them to engage with risk thoughtfully instead of avoiding it altogether. We help our clients prepare for market events, we don’t waste time and money trying to predict them.
Probably the biggest psychological barrier to courageous investing is fear of loss. This is often the root of why people stick with safe, overly conservative investment choices.
Courage helps counteract this instinct. History has shown that some of the best investment opportunities arise during periods of uncertainty or crisis. Markets tend to overreact in both directions – rising too high during optimism and falling too low during panic. Investors who have the courage to sit on their hands and stay invested often benefit significantly when markets stabilize.
However, courage in investing is not about bold, impulsive moves. It is closely tied to discipline and preparation. Taking risks should be grounded in research, clear objectives, and a well-thought-out long-term strategy. Courage is what enables an investor to follow that strategy even when emotions are running high. For instance, sticking to a long-term investment plan during short-term market volatility requires both conviction and emotional resilience.
Diversification is often seen as a way to manage risk, and rightly so. But even diversification requires courage. Allocating money across different asset classes or geographies means accepting that those investments will perform differently. Some will underperform at any given time. It takes confidence and patience to maintain discipline when certain segments of the portfolio are lagging behind others albeit temporarily.
Investing is deeply personal. Each investor has a unique risk tolerance based on their financial situation, goals, previous experience, and personality. What feels like a reasonable level of risk to one person may feel overwhelming to another. The key is not to eliminate risk entirely, but to develop a better understanding of it. This is one of the most important parts of our planning process. We know how big a part emotion can play in decision-making. In conversation with many couples it is common to find differing, sometimes conflicting views on risk. Having a well-grounded understanding of what is likely to happen on occasions over a long-term investment period is fundamental.
In today’s fast-paced, social media dominated world, information saturation point continues to be tested. Investors are constantly bombarded with news, influencers spread their often-ill-informed opinions, and unchallenged predictions. Recent action by the industry regulators has resulted in charges and significant financial penalties being handed down to arrest the spread of inappropriate unauthorised financial advice. This merely amplifies misinformation and uncertainty making sound decision-making more difficult.
Courage is essential in filtering out noise and staying focused on long-term goals. It allows investors to resist the urge to react impulsively to every headline and instead make deliberate, thoughtful, informed choices.
Ultimately, successful investing is not about avoiding risk – it’s about managing it intelligently. Courage is the bridge between knowledge and action. With it, investors can navigate uncertainty, seize opportunities, and build wealth over time.
In conclusion, courage and risk-taking are not optional traits for investors – they are fundamental requirements. By embracing calculated risks, maintaining discipline, and learning from setbacks, investors can position themselves for long-term success. While uncertainty at times will always be part of the investment journey, it is courage that ensures investors stick with their long-term plan.
“Courage is not the lack of fear, it is acting in spite of it.” Mark Twain.