If you’ve been keeping an eye on recent financial headlines, you’ve likely seen a lot of panic and hyperbolic statements surrounding the economy and stock market. It’s enough to make any investor or business owner nervous, no matter how confident you are in your financial endeavors.
However, just because the market may or may not be crashing, doesn’t mean you have to, too. In a volatile market, investors can easily become overwhelmed and stressed, which can impact all other areas of their life.
The key to keeping a positive mindset about market fluctuations is to reframe challenges as opportunities, or as “crisi-tunities.” Here are some tips on how to do just that.
4 Ways to Stay Calm and Reframe Your Mindset
Don’t panic! Instead…
1. Look at the Reality of the Situation
If you’re seeing headlines as you scroll your social media feed or getting bombarded with posts on LinkedIn or Twitter about the state of the market, you might not know the reality of the current situation. Instead of accepting what you see on social feeds as gospel, do your research and look at what the experts are saying about the market, including whether or not a financial crisis really is occurring.
For example, according to the Washington Post, while the markets are down more than 20 percent since January, that doesn’t mean we’re in a recession. In fact, the author of the column clarifies that, as of mid-June 2022, the S&P is actually up 67 percent since March 2020. Additionally, the S&P is up 10 percent over its previous all-time high, which occurred in February 2020. As the WP notes, “No matter how bad you feel, if you’ve had your money in the market continuously, you’re still better off now than you were at the 2020 peak.”
As with most things in life, when you step back and look at the broader picture, rather than the panic of your immediate experiences, you’ll notice that things really aren’t as grim as they may seem.
2. Keep the Big Picture in Mind
Along these lines, even if you haven’t had your money in the market since 2020 or before it, it’s still important to keep the big picture in mind. Look at your long-term goals. You likely weren’t planning on cashing out your stocks this year anyway, right? You had probably planned on long-term investments to fuel your business or retirement. If that’s the case, the current financial landscape is just a tiny bump on a very long road.
3. Focus on What You Can Control
If you still feel worried and stressed regardless of whether or not you’re looking at the big picture, and if you feel like things are spiraling out of control, you may just need to focus on what you can control. Sometimes, a little action and some good decision-making is all it takes to make you feel more confident about the future.
So, what are the things you can control about your financial future—and the future in general—right now?
On the financial side of things, continue to practice healthy habits. Manage your investments wisely, save at a healthy rate, and don’t make poor purchasing decisions.
On a broader scope, practice healthy habits that will help lower your overall stress levels. This might mean you stay off social media until everyone stops talking about the stock market and what it is or isn’t doing. It might mean you stop watching the news every single day. It might also mean you spend less time looking at the fluctuating market on your phone and more time outdoors, with your family, exercising, or enjoying other activities that are shown to relieve stress.
4. Take a “Crisitunity” Approach
Lastly, take a “crisitunity” approach to the matter. What exactly is a crisitunity? A crisitunity is a term coined by Homer Simpson. It’s a mindset in which you choose to look at crises as sources of opportunity. While we always want to avoid crises, some crises force us to innovate, get out of our comfort zones, and make decisions we might not otherwise make. If you can start thinking of your crises as opportunities instead of burdens, you may find that each crisis you face becomes far more manageable than the last.
If the recent market change truly is a crisis in your eyes (despite looking at the broader, bigger picture), what kind of opportunity can you glean from this crisis? Is this a chance to buy low with the ultimate intent to sell high? Do you need to change your investment strategies? Do you need to open your mind to different investment opportunities? Or do you need to seek out expertise and guidance, so that you make the best investment choices for your future?
Whatever the case may be, if you look for opportunities for growth and progress in the midst of your crisis, you can just about always find them.
The Bottom Line
While recent market volatility can seem frightening and stressful, it’s important not to get sucked in by news headlines and social media panic. Things likely aren’t as bad as they seem and recent challenges may prove to be just what you need to not only improve your stress management skills, but also to learn to look for opportunities for growth in every instance. With the right choices and the right mindset, you can continue to live a healthy (both financially and physically) lifestyle, without falling victim to outside circumstances.
Looking for more financial expertise and guidance? Arootah Business Consulting services are available for both hedge funds and family office professionals. Come to us with your most pressing challenges in investments or operations, and we’ll propel you forward to the next phase of your growth.
Sources:
https://www.washingtonpost.com/business/2022/06/15/stock-market-drop-recession-fears/
https://www.schwab.com/learn/story/staying-calm-during-market-storm-5-things-you-can-do-now
While I don’t necessarily agree that we aren’t in a recession. I am feeling somewhat optimistic about our ability to spend our way out of it. Prices are higher but there has also been a tremendous amount of wealth generation which has occurred over the past 25 years.
100 year mark shocks aside, (not all) but many of us a much better off .