NBA Finals Offer Valuable Nugget of Investing Wisdom - 02.26.2018 emotional investing cartoon

Keith McCullough often talks about how winning the full-cycle investing championship requires a lack of emotion. Investors shouldn't get too high when things are going well, nor low when their portfolio encounters an inevitable rough patch.

This mindset was on full display last night during a different type of championship. Nikola Jokic, a two-time NBA MVP, achieved the crowning moment of his career by leading the Denver Nuggets to their first-ever NBA title. (It's no Stanley Cup, but still a pretty big deal.)

Was he giddy? Did he pound his chest, break down in tears or shout that he was going to Disney World?

No. Serbia's first NBA Finals MVP just wanted to go home.

If it were up to him, he'd skip the celebratory parade through Denver altogether.

Even at the highest of highs, it was business as usual. Perhaps that explains how one of the sport's greatest talents put himself in a position to succeed in the first place.

If a multimillionaire athlete can maintain this composure after reaching the pinnacle of his sport, you can do the same when it comes to investment wins and losses. 

In the current economic setup, there are far too many opportunities to be a bag-holder and get burned. When markets hit new highs, it's easy to get lulled into a sense of complacency. Yet it's a dangerous combination when soaring stocks coincide with rising volatility.

Tuesday's episode of The Macro Show provided a reminder of just how quickly things can go wrong. One subscriber strayed from the Hedgeye process, then doubled down on his mistakes by failing to course correct. Now faced with a -12% hole, this investor questioned whether he should just cut his losses altogether.

Hitching your emotional well-being to the highs and lows of the market makes for a psychological roller-coaster.

This is why McCullough always coaches the importance of trusting your process. No matter what game you're playing, making moves fueled by data – not feelings – is the best way to achieve net gains in the long run.