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March 16, 2020

5 Ways To Manage Financial Anxiety

Sean Ferkul

Coping with Financial Stress

The past week saw a huge stir in the markets with oil prices dropping, the threat of COVID-19, and folks rushing into the supermarkets. It’s normal that we start feeling the turbulence at home.

Here are five tips to help us refine and manage that “stock anxiety” so we can better manage our emotions in stressful times.

1. Recognize and analyze cognitive biases that impact judgment 

  • One common bias at times like these is loss aversion. We often feel the impacts of loss to a greater extent than the gains we have experienced. Acknowledging this helps us to gain perspective: while highlighting a drastic drop we may be discounting the prior gains we have made.
  • Another is catastrophizing. It’s when we give greater weight to the potential outcome that would be most damaging. This is a troublesome bias to hold when working with something as unpredictable as the stock market because it moves along arbitrarily and is often hard to predict. This bias accelerates and enforces damaging thought patterns that may have negative impacts and increase our feelings of anxiety.

2. Seek mentorship and peer support 

This provides us with a platform to meet with like-minded individuals that have dealt with similar situations. We can gain realistic tips on how to manage our anxiety when dealing with the stock market. In addition, it reminds and reassures us that the ebbs and flows of the market are to be expected.

3. Put things into perspective— adopt a bigger picture 

We can use graphs to highlight the peaks and valleys that our stocks show. Adopting a bigger picture perspective allows us to see that these peaks and valleys are all over the stock market and this is not the first dip in the market and it won’t be the last. Adopting a perspective that considers the impact these dips will have in the future can be beneficial for our next moves and it can reduce some initial anxiety.

4. Research 

Find an area you’re unsure of and learn. These moments of anxiety are often exacerbated by lack of understanding about markets. We can ground our anxiety and manage our expectations with validated expertise about trends from objective viewpoints that are outside of our own. We can also use this research to challenge some of the negative thought patterns that may reinforce anxiety.

5. Relax 

When we experience dips in the market this triggers a fight or flight response in our body that is having a real impact on our anxiety. It is important to remind ourselves that we are safe from harm and practice exercises like meditation and mindfulness to ground ourselves in the knowledge that we are safe. 

It’s completely normal to have anxiety when we face financial and fiscal challenges in the stock market. These challenges bring on new feelings of unknowing that impact our bodies in very real ways. It is integral to sit with ourselves, pay attention, and notice how stress is manifesting in our bodies.

The effort we put in now can be the foundation on which we build a strategic response to anxiety with a goal of preventing overwhelm. We’ll feel the benefits now and in the future.

If you are interested in reading more helpful articles about finances, the stock market and investing strategies, at Shift we enjoy Wealthsimple.

This post contains affiliate links. This means that we may get a small commission should you buy something through one of the links, at no additional cost to you. Thanks for your support!

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