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How to Ease Stock Market Anxiety?

Is money on your mind? For those who have stock investments, this could have a negative impact on their physical and mental well-being.

After tracking hospitalizations in California for three decades, two University of California at San Diego researchers showed that stock price movements affect investors’ health almost immediately, with significant market falls raising hospital admission rates for the following two days. For mental health issues such as anxiety and depression, the effect was considerably more pronounced.

The researchers looked at Oct. 19, 1987, known as “Black Monday,” when the US stock market plummeted by over 25 percent. According to the authors, admissions to hospitals in California increased by more than 5% on the same day, indicating that stock drops have an almost instantaneous impact on investors’ mental states. Patient admissions resumed their pre-crisis levels the very following morning.

Activating the fight or flight response increases our heart rate, blood pressure, and breathing rate. It also causes our pupils to dilate and our blood vessels to contract. The purpose of this is to prepare us to fight or flee the threatening scenario.

It’s easy to see how a non-life-threatening incident like the recent stock market turmoil could prompt a fight or flight reaction in people. There are times when the volatility of the stock market makes us feel like we are being chased by wild animals. Here’s how to keep those anxious feelings at bay:

1. Take a Step Back and Focus on the Big Picture

It is common for the stock market to experience volatility, corrections, and bear markets on a regular basis. Over time, the market tends to rise, but not in a straight line. Even in bullish years, the stock market is prone to swings. A bear market occurs roughly every six years.

2. Recall the Financial Crisis’s Lessons

During the financial crisis of a decade ago, what did we learn? People go about their lives, markets recover, and those who try to time turbulent markets generally lose. Investors who remained calm and invested through the worst of the financial crisis fared the best. Now is the time to put your newfound knowledge to use. Don’t freak out, keep a level head, and keep an eye out for bargains in the market.

3. Don’t Fall Prey to Negative Cognitive Biases

The agony we feel when the stock market falls is caused in part by a few cognitive biases.

In the first place, there is the notion of loss aversion, which states that people feel the agony of loss nearly twice as strongly as they feel the joy of gain in their lives. It is because of this imbalance that we respond so strongly to a monetary loss.

An example, we can think of anchoring as an example of this. As a rule of thumb, investors tend to base themselves on the highest worth of their investment portfolio. If your portfolio was $200,000 in January and is now $185,000, you may feel as if you’ve wasted $15,000 in your investments.

Thinking this approach misses the fact that the portfolio was $180,000 a year ago and $135,000 five years ago. As a result, your portfolio’s worth is still rising to $185,000 today. Aside from that, the market is expected to soar much higher in the years to come.

You May Read: The Evolution of the Bear Market

4. Silence the Commotion

Investors’ anxiety levels can rise if they read and watch too much financial news.

Investing in the stock market can be a perplexing experience for many people. Take a look at how much information investors have at their fingertips these days, and you’ll see why. Reduce the noise by hiring a financial advisor to handle your investments instead of doing it yourself.

5. Activate Your Relaxation Response

In order to counteract the fight or flight response, it is important to activate the relaxation response instead. This physiological mechanism is a deep relaxation state that activates the parasympathetic nervous system.

Daily meditation and breathing exercises can reduce blood pressure as much as medicine. Chronic stress has been linked to a variety of health issues, including fibromyalgia, gastrointestinal problems, sleep disturbances, hypertension, and anxiety disorders, as well as other conditions.

When you start to feel anxious, taking a few deep breaths and focusing on your breathing helps tremendously. Visit BetterHelp to learn more about anxiety coping mechanisms to help you through this process.

6. Have a Plan for Market Volatility

There should be a plan in place before any decisions are taken.

A sound strategy takes into account both the benefits and drawbacks of market volatility and has a plan in place regardless of the stage of the market cycle. Investors that have little to no anxiety have a clear understanding of their long-term goals, timeframe, and risk tolerance.

Those who worry about investing do so because they don’t have a strategy and are instead speculating rather than making an investment. The two are vastly different.

7. Do Not Let Yourself Get Demoralized

Things don’t always go according to plan. Stock prices fluctuate, economies grow and decline, and investors with hazardous ideas become nervous. To limit your losses, start small and learn from your own mistakes as well as those of others.

Start all over again if your investments depreciate. You’re more likely to recover losses if you’ve assessed your risk tolerance and picked a strategy and investments that match your goals. If patience is a virtue, it’s even more important when you’re dealing with money.

8. Decide on an Investment and Go for It

In some cases, you have to put yourself in a situation where you aren’t fully at ease. Concepts become clearer and worry diminishes as you progress through your investment adventure.

Following the identification of your plan, you may begin selecting the types of investments you wish to make. A business 401(k) or an individual retirement plan may be the most familiar to newcomers (IRA). You’ll be a lot more confident in other sorts of investing after watching your account fluctuate with the stock market.

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