Anxiety and the Loss of Joy
In an interesting conversation last month with a family we take care of, they indicated that when in Florida for a few months they noticed that the anxiety level was lower there than it is in Canada as related to all things COVID. We have heard similar observations from many families.
Same issues, same pandemic, yet differing levels of fear and anxiety. Why?
One of the topics we try to cover in our mid-month reports is non-financial matters that have financial implications. This month we are covering the real world effects of constant anxiety that seems to have so many people “off” and wondering why they feel that way. Anxiety can unknowingly creep into their financial decisions and hamper their ability to welcome joy into their relationships and life, as they are despondent with a sense of unease. What is a potential antidote to this problem? Be diligent in how you consume media. But exactly how do you do that?
Ask yourself the following five questions:
- Who is the author or source of this piece and are they somehow remunerated for their "opinion"?
- Do they have any conflicts of interest that could bias their expert opinion?
- What is the real story beneath the loud headline?
- Are my media sources independent, tilted left or right, or biased toward some other certain view?
- Should I consume less media and read more history, or just consume less information overall and get outside to go for a walk instead!
Here is a stock market example (see graph):
- December 2018 headline: “Stocks suffer their worst December since 1931, falling 9%”.
- If you were thinking about investing in November 2018 and actually did, you feel like you have made a grave mistake as you have “lost money”.
- If you thought “there is going to be a correction, I should wait”, you feel smart, but you keep waiting because now you are afraid that the market could keep declining.
- On the other hand, the person who believes that long-term money should be invested for 10 years or more and ignores short term results, invests in November 2018 and checks their statement every year in November, including in 2021, to see that they have made significant gains along the bumpy (which is normal!) road of investing. Seems simple, but it’s not easy.
What is the takeaway?
We often overestimate what is happening in the short-term due to the daily noise we pick up on our phones through social and legacy media because we constantly forget that they are trying to get our attention with an always compelling and urgent story. Even with large scale market, political, or health stories we only see the most dramatic piece of the whole story as it is the urgent and the shocking tidbit that grabs our attention. Unfortunately, we are built that way, we respond to shock and it is why people slow down to look at car accidents, they don’t slow down to look at smooth running traffic.
So to keep finding all the pertinent facts, and maintain balance, ask yourself: what is the real story here? What else is going on that is important that I am not hearing? What else is going on that is not being focused on? It is true! Stocks did fall 9% in December 2018, and yes that was their worst December since 1931, but that fact also made stocks cheaper for long-term investors who want to invest when stocks are selling at a bargain. That was an important and positive counterpoint that was missing from the “story”. What if the headline read: “Stocks go on sale after biggest December discount since 1931!”
Would we have felt different? Would we have had less anxiety? We think so, and it applies to most stories. So from now on, keep perspective in mind when you find yourself worked up by what you are reading or hearing and remember that they want your attention, so they will focus on what will grab it, which tends to be negative or alarmist, but you don’t need or have to let them bring you down.
Randy and Ian