Subtitle: When doing less wins more.

The Story

It was a tense afternoon cricket match. The batting team had lost three quick wickets.
The captain, under pressure from the crowd’s roar and his own nerves, looked to his coach and called out: “Time to make changes.” Within minutes, the batting order was reshuffled, and a new fielding plan for second innings was hastily drawn up.

The structure that had held steady all season — the defined roles, the practised tactics and planned strategies — cracked under the weight of panic. The team’s momentum stalled. Players hesitated in their new positions, the opposition sensed the shift, and the scoreboard after first innings read: “Too many changes, too soon.”

It wasn’t a lack of skill that cost them the match. It was the fear of staying still.

Understanding the Idea

In behavioural finance, this impulse is known as action bias which is the tendency to favour action over inaction, even when doing nothing may be the better, rational choice.

To clarify the terms:

  • Action: The move, change or intervention we believe will fix or influence something.
  • Bias: A mental shortcut or tendency that causes deviation from purely rational decision-making.

Together, action bias describes our instinct to move, or to act, in the belief that inactivity equals negligence. But in complex systems like investing (and sport), that belief often backfires.

The Concept in Depth

Studies of decision-making under pressure repeatedly show that humans prefer doing something over waiting and watching — because movement feels like control. The action bias describes our tendency to favour action over inaction, often to our benefit. However, sometimes we feel compelled to act, even if there’s no evidence that doing so will lead to a better outcome than doing nothing would.” (The Decision Lab)

In investing, this playground becomes perilous. When markets wobble, the impulse to react kicks in, even when it is unnecessary.  Each action offers temporary relief from uncertainty; but at a long-term cost.

One powerful example comes from sport. A penalty shoot-out study found that when the goalkeeper’s team was behind, the keeper dived to his right 71% of the time — compared to 48% when ahead, or 49% when tied. That bias toward acting (diving right) cost performance: the real shot to the right was only about 43% of times. That’s difference of 28%! (ResearchGate)

In other words: action driven by fear of loss or desperation can worsen the outcome. The preferred tactic (diving right) felt like doing something, but doing nothing or waiting might have offered a better chance. In markets, frequent portfolio checks, reacting to every headline or daily move, switching funds on fear or hype; these are the investment parallel of the goalkeeper’s dive. So what is the antidote? Patience, rules, structure. A sound methodology rather than a reflex.

After the match, the captain sat quietly in the locker room. The coach joined him and said, “We didn’t lose to the other team, we lost to the urge to act.” When the next crucial knockout phase arrived, the captain did something harder than changing tactics: he stuck to the plan. The players knew their roles. No rush to “do something”. The storm passed. The team regained rhythm. And when the victory came, it felt like quiet certainty, and not a frantic movement.

In investing, as in sport, the scoreboard rewards calm execution, not constant interference. The best moves often begin by staying still.

Key Takeaways

  1. Uncertainty triggers movement — our brains treat inaction as failure, even when waiting is wiser.
  2. Action isn’t always control — Doing something can feel good but may reduce outcome quality.
  3. Build your system, then trust it — Automate, define rules, review periodically rather than reacting continuously.

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Disclaimer

The content shared by Wealth First is for general informational and educational purposes only and should not be considered as investment advice, research, or a solicitation to buy or sell any financial product. Past performance is not indicative of future results. All investments are subject to market risks, including possible loss of principal. Readers should consult their financial, legal, or tax advisers before making any investment decisions tailored to their personal circumstances. While utmost care is taken to ensure accuracy of information, Wealth First does not guarantee completeness, reliability, or timeliness, and shall not be liable for any direct or indirect loss arising from reliance on such information.

This content is prepared purely for educational awareness in accordance with SEBI and Exchange guidelines permitting non-promotional, concept-based communication. It does not contain any offer, inducement, or advertisement for account opening, product purchase or trading activity. All characters, events and examples are fictional and for illustrative storytelling only.