As humans, we often form strong emotional bonds with things that feel familiar. This sense of "home" influences not only our daily lives but also our investment decisions. Many of us invest in companies whose products we use or in businesses located in our region. It feels good to own a small piece of something familiar and trusted. But what happens when this connection blinds us?
1. Familiarity through everyday life
When I first started investing, the stock market was a big mystery. Where should I begin? The answer seemed obvious: with companies whose products I used daily. Bayer was one of them. Aspirin is in almost every household, and as a German company with a long tradition, Bayer seemed like a rock-solid investment. It’s easy to identify with such companies, especially if you come from regions like Leverkusen, where Bayer plays a central role.
2. The Bayer story: A warning about emotional investments
Before acquiring Monsanto in 2018, Bayer was a popular stock. The share price was around 100 euros, and dividends were solid. For many investors—probably including company employees or people from Leverkusen—Bayer seemed like a safe, long-term investment.
But after the Monsanto acquisition, everything changed. Bayer suddenly faced billions in lawsuits in the U.S., causing the stock to crash. Today, it’s worth just over 20 euros, and its dividend has been significantly reduced. Many investors faced massive losses.
3. Lessons to learn
The Bayer story shows why keeping a cool head is crucial, even when it’s difficult. Those emotionally attached to a company—whether through their hometown or workplace—tend to underestimate risks. And when a crisis hits, panic-selling is tempting.
4. Finding balance
Today, I try to keep my investments as rational as possible, even when I invest in companies that mean something to me. Bayer is an example that even familiar companies must be critically examined. It also highlights the importance of a diversified portfolio.
Conclusion:
Products and companies you know and love are a great way to start investing. But as Bayer’s story shows, emotions should never take control. Regardless of how strong your connection is, numbers and a solid strategy matter most.
