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Stock Market Hierarchies: What We Know
Linda Goin
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The humanist psychologist, Abraham Maslow, believed in the basic tenet that all people desire to be self-fulfilled. He focused his work on human potential, and tried to explain how we manage to strive to reach the highest levels of our capabilities.
Last week we looked at the physical levels, and how they affect us emotionally. Another aspect to our development is the knowledge we seek at each level. If we apply this information to our roles and responsibilities in society, we might find we're not as helpless as we feel during times of stress and duress. Each level of knowledge in the Hierarchy of Information coincides with the levels the Hierarchy of Needs from last week.
Cora and I wondered how this information could be applied to the stock market and our research. After reading the steps, we realized these levels applied to a lot of single parents and their excuses to avoid
investments. Read on, and you'll see what we mean:
| 1. |
Cope: This is the level where we seek help for our families and ourselves. Here's where we don't even think about the stock market, as we have no food, no water, no shelter. Maslow believes the only reason we wouldn't move beyond this stage or through the next stages would be due to hindrances placed on us by society. This would include lack of education or lack of social responsibility to those who need help. Lack of progress can also be attributed to times of war or other disasters, man-made or otherwise. We can also place barriers on ourselves due to our own reluctance or fear to find resources. Oh - add pride to this list. Some folks place a great deal of emphasis on humility; but when you have children, please place them before your pride in seeking help.
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| 2. |
Help: This is the second level of information, arriving after we've obtained the necessities to survive. Now we seek knowledge on how to safeguard our possessions and ourselves from real or perceived harm. Many people rely on instinct instead of knowledge at this level. Irrational behaviors sometimes result from lack of knowledge. We're back to herd instinct and basing our actions on rumors instead of factual information. Once we realize that many people at this level will provide information to protect and safeguard their own interests, we become more enlightened. We're now able to protect our own assets, which gives us more confidence.
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| 3. |
Enlighten: Hopefully, we won't get stuck in a rut and close our minds to new ways to improve our safety and basic needs. If we're open to new ideas, we can begin to learn how to improve our relationships with others, and to develop our dreams. This is the level where we become concerned about our future, rather than a day-to-day survival plan. College education, retirement, plans to increase our knowledge of the world or how we fit into this world becomes more important. We begin to increase our knowledge about our survival base so we never have to go backwards to the coping level again.
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| 4. |
Empower: I'm Powered! This is our favorite word. Once we reach the level where we feel safe, our needs are met, and we know the directions we want to travel, then we have POWER. At this level, we know how to manage our money and we accept our own mistakes. This means we don't invest unless we are in the position to leave that investment money alone for a period of time. This also means we don't point fingers at others for losses. We begin to accept responsibility for our own role in society, and we begin to understand our importance in this role. This role might be vast or limited, but we know we have the capability to help others, now that our own domain is secure.
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| 5. |
Edification: This was the only word Cora didn't understand. Basically, it's education with a higher goal in mind. The dictionary places an emphasis on "spiritual," but Maslow avoided the word and replaced this aspect with values such as truth, beauty, unity, justice, order and simplicity. This would lead me to believe that daytrading is out if I want to attain a space on the edification level. At this peak, I really don't want to spend an inordinate amount of time "perfecting" my portfolio. I already know my direction, and I can leave it alone while I go spend time with good friends, family, and with other goals.
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When I place an emphasis on education - both for our children and ourselves - it isn't just for our need to develop a sense of safety. It's also for self-protection, and to achieve a higher level of living beyond our concept of material items. As women, we have the power to move mountains. However, if we move them to places where they can't survive, our power is misdirected.
Cora and I have decided the market is perfect for us to begin investing in businesses that make sense for her future. In the meantime, we're going to take a road trip to visit my brother. I'm sure his alternate viewpoints on the market will be edifying. We'll let you know.
Until next week,
Linda Goin
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