News headlines are designed to grab our attention, and if the headline is a presage of doom, the more likely we are to click on it. Recent world events such as the global pandemic, looming inflation and warring countries are a cause for concern and can take an emotional toll– here’s ten tips on how to manage this:
1. Recognise the stress you might be feeling. With the increasingly worrying situation in Ukraine, it is normal to feel horrified and powerless as innocent people are suffering. It is also normal to feel uncertainty with the geopolitical and market debates raging on. If you think reading an article is going to increase feelings of stress – refrain from clicking on the headline and scroll on.
2. Limit checking in to the news to a few times a day. 24/7 access to real-time coverage via your device is bound to increase feelings of stress with scary headline after scary headline. You don’t need to be constantly plugged into the news – by checking into what’s happening a few times a day, you give yourself time to process, recharge and focus on things you can control.
3. Become a conscious investor. Avoid investing in funds with large exposures to Russia (Barbuscia, 2022) or donate money to a humanitarian fund or cause that supports refugees. Monetary contribution can combat feelings of helplessness because you are helping to make a difference.
4. Accept that uncertainty with investing is unavoidable. Second-guessing markets is a waste of time as all available news information is already reflected in prices – it’s what happens next that counts, and only time will tell.
5. Remember that share markets can recover. Many major geopolitical events have occurred in history, such as the Second World War, Korean and Vietnam Wars and 9/11 and its subsequent wars. In each case, share markets have eventually recovered, usually within months (Ritholtz, 2022).
6. Accept that risks can go either way. It is important to your well-being to maintain a measured response as an investor as markets will often price in worst-case scenarios and then bounce back dramatically if events turn out better than what is priced in. This occurred after the initial shock of the pandemic in March, 2020 (The Evidence-Based Investor, 2022).
7. Get help when you need it. Talking to a trained professional can help give you a path forward and increase a sense of security. Getting professional financial advice can provide you with a structured financial plan that accommodates the prospect of extreme events.
8. Determine what you can control. Draw a line down a page with two columns with the headings: ‘what I can’t control’ (1st column) and ‘what I can control’ (2nd column) and list your responses in each column. To determine what you can control, focus on the second column – what you can control, such as your social media habits, exercising, ensuring you have access to cash, seeking help when required.
9. Remind yourself that change is inevitable. Nothing lasts forever and change is part of what it means to be human. Resisting change is a waste of energy and accepting change makes it easier to deal with when it applies to both good and bad events.
10. Consult the texts of the great philosophers and thinkers. How we think and act as human beings, citizen and investors is a true test of our character. Viktor Frankl, an Austrian Neurologist, Psychiatrist and Holocaust survivor, wrote in his book ‘Man’s Search for Meaning’ that there will always be suffering: it is how we react to the suffering that counts (Frankl, 1992).
If you would like to chat about your financial goals please call me on 5331 6550 or email andrew@arwm.com.au
Cheers, Andrew
References:
Barbuscia, D. (2022, March 3). Factbox: The funds that have large Russia exposure. Reuters. https://www.reuters.com/markets/europe/funds-that-have-large-russia-exposure-2022-03-02/
Ritholtz, B. (2022, February 25). How Geopolitics Impacts Markets (1941–2021). The Big Picture. https://ritholtz.com/2022/02/markets-geopolitics-1941-2021/
T. (2022, March 3). Pondering the imponderables in 2022. The Evidence-Based Investor. https://www.evidenceinvestor.com/pondering-the-imponderables-in-2022/
Frankl, Victor (1992). Man’s Search for Meaning. (4th ed.). Boston, MA: Beacon Press.
