Carolyn Stern, a certified Emotional Intelligence and Leadership Development Expert, and an award-winning author of The Emotionally Strong Leader joins The Market Online to discuss Emotional Intelligence in Investing and financial decision-making.
Emotional intelligence involves being aware of and managing your emotions, particularly in high-pressure situations like investing. It helps prevent impulsive decisions driven by fear, such as FOMO (fear of missing out), and promotes rational thinking.
Stern introduces the “High EI Way,” a five-step process to manage emotions: recognizing feelings, reflecting on their triggers, regulating responses, resetting to gain perspective, and responding thoughtfully. She emphasizes that emotional intelligence can be improved over time and is crucial for business leaders, particularly in industries like finance, where decisions often rely on balancing emotions and rationality. Stern also offers courses and coaching to help individuals and organizations enhance their EI for better decision-making and leadership.
Her courses have been adopted by top universities in North America and her company has provided training programs to business leaders across the continent in various industries including tech, finance, education and healthcare.
In plain terms, Stern notes that, “Emotional Intelligence (EI) is being intelligent about your emotions. It’s having the mental skills to prevent your emotions from having undue influence over your actions.
As we apply EI to the financial industry, Stern adds, “EI makes you more aware of what you’re feeling and how your feelings might be impacting how you’re making decisions about your finances.”
Some questions to consider when applying EI to your finances include:
- Do you have a mental model of scarcity?
- Are you concerned about your finances?
- Do you have low emotional regulation?
- Do you let your impulse control guide your decision making?
- Do you make rash decisions or do you take too long to make a decision?
In the Intelligent Investor by Benjamin Graham, the fear of missing out (FOMO) is an area of be vigilant in when it comes to finances. He recounts the experience Sir Isaac Newton, one of the world’s greatest scientists, as an example of someone who made bad investment decisions. Graham believed that Newton, allowed his emotions to influence his rational decisions, including one where he lost the equivalent of three million dollars in today’s era.
Stern highlights that emotional intelligence can help manage emotional highs and lows by enhancing emotional regulation. She explains that understanding your emotions is a more effective strategy than reacting impulsively. The goal is to find balance—ensuring emotions don’t cloud objectivity while still acknowledging their role in decision-making.
Stern’s Five-Step Model: The High EI Way
Stern’s High EI Way, provides a structured approach to developing emotional intelligence, helping individuals enhance self-awareness, improve emotional regulation, and make more thoughtful decisions.
Five Steps to High EI:
- RECOGNIZE: Notice what you’re feeling—this often starts with physical sensations like a tight chest or altered breathing.
- REFLECT: Identify what triggered the emotion. For example, seeing a crypto surge might cause anxiety due to FOMO (fear of missing out).
- REGULATE: Manage your emotions in a healthy way by creating space between the trigger and your reaction, allowing for a more thoughtful response.
- RESET: Calm down, gain perspective, and restore emotional balance. One strategy is writing down your emotions, the trigger, your initial reaction, and the impact. This step helps you ask, “Is this my reality, or is it the reality?”
- RESPOND: Express yourself thoughtfully and professionally. By working through the previous steps, you can respond intentionally rather than letting emotions dictate your actions.
- Applying EI in Leadership & Decision-Making
Stern teaches a range of emotional intelligence (EI) skills designed to help professionals navigate both workplace challenges and personal growth. One key area she focuses on is decision-making, where she helps individuals strengthen their problem-solving, reality testing, and impulse control—ensuring they make thoughtful, balanced decisions rather than reacting impulsively.
She also emphasizes the importance of emotional expression and assertiveness. Stern guides professionals in expressing their emotions constructively, ensuring they communicate their feelings with confidence while remaining respectful. She teaches that assertiveness is about sharing your thoughts and opinions in a non-offensive manner, rather than reacting disrespectfully and allowing a single moment to define who you are.
By honing these EI skills, individuals can foster healthier relationships, make better decisions, and lead with emotional intelligence in all aspects of their lives.
Emotional Intelligence Strengthens Over Time
Unlike IQ, which typically peaks around age 18, emotional intelligence (EQ/EI) has the potential to grow throughout life. In fact, research suggests that EI reaches its peak in our 60s.
Stern explains, “Unlike your IQ, which peaks at 18, your EQ can rise as you get older. In fact, one study says it peaks in our 60s.” She compares developing emotional intelligence to strength training at the gym —it requires consistent effort and practice.
Improving EI
“Happiness is a byproduct of Emotional Intelligence” – Carolyn Stern
Just like building physical muscles requires consistent effort, strengthening your emotional intelligence (EI) takes practice and dedication. It starts with self-awareness—understanding your emotional makeup and identifying the challenges you need to address.
Stern also emphasizes the importance of balance. Developing EI isn’t just about increasing empathy; it’s about knowing when you’re too emotionally invested in others’ feelings and when you might need to show more empathy. Striking this balance ensures you stay emotionally strong while maintaining healthy relationships.
The more you train and challenge yourself—through reflection, feedback, and real-world application—the stronger your emotional intelligence becomes over time.
The Link Between EI & Happiness
A strong indicator of emotional intelligence is happiness. As Stern points out, “If you’re a happier person, chances are you’re improving your emotional intelligence. But look at your relationships—do you have unresolved conflicts? Are you able to navigate difficult conversations?”
If not, you may need to strengthen your social skills, a key component of emotional intelligence.
In the workplace, low EI can manifest in subtle ways—people-pleasing tendencies, reluctance to give feedback, resistance to change, or discomfort with difficult conversations. Recognizing these patterns is the first step toward improving EI and becoming a more effective leader.
Strengthening Your Emotional Intelligence (EI) Muscles
Enhancing your emotional intelligence (EI) can improve both interpersonal skills and decision-making in areas like finance and investing. One effective way to develop EI is through online learning.
“Stern’s website – https://eiexperience.com/online, offers self-directed training modules designed to help individuals build their emotional intelligence at their own pace. Her company, EI Experience also provides live and virtual training sessions for CEOs, businesses, and educational institutions, equipping leaders with the skills to navigate emotions effectively in professional and personal settings.”