The stock market turns the old adage upside down: what goes down, must come up. One only needs to look at a graph of the S&P 500, Nasdaq, or the Dow Jones to see that a dizzying rise follows every tumultuous tumble. Of course, when you open your phone in the morning and see stocks plunging, headlines promising doom and gloom, and political rivals wagging accusatory fingers, it’s easy to think the time is nigh to sell everything before you lose everything. So how can one manage their emotions in a bear market so they don’t make costly mistakes? Let’s look at some ways to reign them in!
As previously alluded to, the news tends to focus on the negative, and news regarding the stock market downturns is no exception. Headlines are designed to attract clicks and glue you to the screen. It’s natural to be concerned about your nest egg, but doomscrolling won’t do you any good – it will only lead to unbearable anxiety.
Take a deep breath, relax, and don’t succumb to scare tactic fallacies. Turn off your news notifications on your phones. Stay off Facebook. Fear is your greatest enemy in a volatile market, so it’s exceedingly important to keep a cool head, take a step back and look at things through a historical and logical lens. Go for a run, hit the greens, do some breathing exercises – anything to help you calm your nerves so you can look at things without roiling emotions or unrealistic expectations.
One doesn’t need a crystal ball to see the future. The stock market is quite unpredictable in the short term, but in the long term, it’s absolutely predictable. Even in the worst of times, the market has always returned to pre-crisis levels and beyond. This time or any future times will not be any different. Those who stay the course are those who stand to gain the most, so instead of selling, discuss dollar-cost-averaging strategies with your advisor or buy the dip to take full advantage of a bear market. Unfortunately, investors who panic in a bear market will only lock in losses, and remember – there’s always someone on the other side of the trade who pockets the money. Be on the right side of that trade!