How to Keep Your Cool During Financial Turmoil with Mindfulness and Other Strategies

How to Keep Your Cool During Financial Turmoil with Mindfulness and Other Strategies

It’s common to find yourself feeling anxious during turbulent financial times. However, controlling these feelings is crucial to avoiding emotionally-driven financial mistakes. In this article, we’ll explore some simple strategies to navigate today’s volatile times with less stress.

1. Break the Habit of Constantly Checking Your Account Balance  

Feeling the urge to monitor your investments closely during volatility is natural. However, constantly checking your account balance can lead to emotional reactions, such as selling low (or buying high). These emotionally-driven decisions can sometimes derail years of progress in minutes.

Consider looking at your accounts much less frequently, such as monthly or quarterly. This can help reduce anxiety and prevent you from reacting to short-term fluctuations.

“The stock market is a device for transferring money from the impatient to the patient.” – Warren Buffett

2. Be Mindful of your News Consumption

Research suggests that scary headlines grab more attention than feel-good stories. Today’s online publishers and TV producers embrace this, often making events seem more dramatic than they really are. Because both fear and greed is the enemies of successful long-term investing, it’s critical to strengthen your self-defense so you can avoid being provoked by these headlines.

Another danger is content that seems educational and unbiased but is anything but. These articles or ads often subtly promote specific products and use wording such as safe or guaranteed. These pieces are usually rolled out during economic turmoil, preying on those who may already be second-guessing their long-term investment strategy.

To maintain a balanced perspective, the best thing to do is to limit your overall news intake during stressful times. Then, also take care to understand the sources of what you do read or follow. This applies to social media too, where unverified user-generated content runs wild.

3. Get a Financial Plan in Place and Review it Often  

A financial plan is a road map to your future. It can also be your safe haven in a storm, so it’s critical to put one in place and keep it up to date.

A good financial plan helps keep you focused on the long term. Remember that the market’s ups and downs– even the sharp ones– are a natural part of the economic cycle. And inflation and interest rates too will vary over long periods. When times are uncertain, a quick review of your plan can remind you that investing is only a part of the overall equation to achieving your goals.

Also, remember that any new money you put into the market during declines offers you a significant benefit: sale prices!

Just like ignoring turbulence on a plane because it’s normal, focus on your long-term plan to minimize your anxiety.

4. Embrace Mindfulness Techniques  

Mindfulness strategies such as meditation, focusing your attention, and deep breathing can help you be less reactive to external factors.

This Psychology Today article has simple strategies that can quickly short-circuit emotional reactions. If you find yourself anxious, try one of these:

• Ask yourself to stop and guess your body temperature.
• Listen to the sounds around you and name them individually.

Or, even pausing for a few deep breaths can divert your attention back to the present.

5. Seek Professional Guidance  

Finally, don’t be afraid to lean on us during stressful times. We can answer your questions and help remind you that market drops are a natural part of the investment process. Remember that you don’t have to face these challenges alone. Talking with us can help you avoid any snap decisions that you might later regret.

Key Takeaway 

For nearly 10 years following the end of the Great Recession, we’ve experienced unprecedented low volatility. At the same time, the markets went up for almost a decade straight, which is extraordinary. Markets tend to revert to the mean, and we’re seeing that now with increased volatility over the past three years. Ideally, we’ll soon return to a more normalized pattern with less volatility. Until then, we can use these strategies to cultivate patience, knowing that these short-term bumps are an expected part of the process.

Questions and Consultations

If you have questions or if you’d like to schedule an appointment to discuss your finances, contact us today.

The opinions voiced in this material are for informational purposes only and are not intended to provide specific advice to any individual. Consult your legal, tax, and/or financial advisor to determine what is appropriate for your situation.