For example, human beings also hold what amounts to a portfolio of emotions. Some of these emotions are positive—for example, love, pride, and awe. Others are negative—sadness, frustration, or shame. In general, we tend to overvalue one category and undervalue the other. Heeding others’ advice and our own intuitions, we stuff our portfolios with positive emotions and sell off the negative ones. But this approach to emotions—to jettison the negative and pile on the positive—is as misguided as the approach to investing that prevailed before modern portfolio theory.
