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Avoiding Stress in Volatile Markets

3 mins | Intermediate

Summary

There are 4 key ways to minimise stress as an investor in a volatile market. Try to take a step back and think of the bigger picture, spend less time checking in on your portfolio, avoid listening to the niggling doubt in your head, and finally, remember that you can’t change the past!

Stress is a natural response of the body, brought on by things our mind considers dangerous or risky. So if a volatile market - a market not going so great - makes you feel stressed out and a little dejected, remember you’re not alone and that it can often be a completely natural response.

Just because stress is a natural response, doesn’t mean you have to stay stressed. It’s important to remember that volatile markets will occur many times throughout your life, so learning how to manage stress is the key to surviving them. 

Here are 4 strategies to help you stress less in a volatile market:

  1.   Step back and think of the bigger picture

Market volatility, market corrections, bull markets and bear markets are all a natural part of investing. Whilst markets head in a general upward direction throughout time, it's never a straight line. Take a step back and remember it's all part of the bigger picture. 

  1. Don’t keep looking at your portfolio

Whether in good times or bad, long-term investments are best not to be looked at  too often. You may start to indulge or restrict your investment choices depending on what the market looks like and lose sight of the big picture. 

  1. Don’t listen to doubt

Our minds have cognitive biases that are built into us, and are partially to blame for the stress a volatile market causes us. The main being loss aversion which explains that people experience loss twice as much as they feel pleasure from gain. So when your mind starts swirling with doubt, try to remember that it’s working against you.

  1. Hindsights a b*tch

It’s all fun and games till you think of the things you would’ve, should’ve, could’ve done. Nobody has a crystal ball that can magically predict things. Ruminating on the choices we make is counterproductive and won’t do you any good - so don’t do it at all.

Feeling extremely overwhelmed by your financial situation? Has your life been impacted negatively by recent financial changes? Here’s a list of people and companies who are eager to listen and provide support to you.

Lifeline - 13 11 14

Salvation Army - 1300 371 288

Centrelink Crisis Payment

Investing involves risk. You aren't guaranteed to make money, and you might lose the money you start with.
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