Standing Up to FEAR

It is easy to be driven by fear. In fact, our brains are programmed to respond to anything that prompts anxiety or unease–it’s a survival instinct. But we’re long past our hunter/gatherer days, and we CAN make a conscious effort to stand up to fear. It just takes a little effort and intentional planning.

First of all, it’s a good idea to take away whatever is feeding your fears.

Stay off social media; don’t watch the news all day long. Stay informed, but don’t obsess (For more tips on this, please see my latest blog post on staying informed while avoiding social media overload).

Another thing you can do is avoid checking the stock market on a daily basis. If you know you’ll be tempted to move your money around with every dip in the market, it’s best to not pay attention to the daily statistics. Trust that your financial advisor will know how best to react to drastic market changes (NOTE: most of the time, the right reaction is to do nothing, or simply redistribute investments).

By removing yourself from your fear sources (even temporarily) you can approach the problem with a clearer head and purpose.

Secondly, make yourself future-focused.

It’s easy to dwell on the hardships of the moment, but it’s NOT a good idea to let those hardships drive your actions. If you immediately respond to fear, you’ll end up making irrational decisions that could potentially cause enormous harm in the future.

You wouldn’t sell your house at the first sign of disrepair. Instead, you would hire a plumber to fix your sink or purchase a new furnace.

You wouldn’t quit school after receiving an imperfect test score (at least, I hope you wouldn’t!). Instead, you would study a little harder and attempt to do better next time.

The same logic can be applied to the stock market. If you see the market dip, it’s not prudent to sell everything and get out. Instead, think about the larger picture: Could you be needlessly throwing away money, just because you have cold feet? After all, it’s common knowledge that “buying low, selling high” is a surefire way to make money in the stock market. But I understand–seeing the market slump to low levels is nerve-wracking. It is. And that’s one of the many reasons to consult a financial advisor before making any drastic decisions.

As a financial advisor, I am often the only one standing between a client and a poor decision. It’s my job to be impartial and logical. When I see the market sliding downward, I don’t panic. Instead, I think, “It might be a great time to buy OR, possibly, redistribute investments.”

Third, develop trust.

Trust that the market always experiences highs and lows, and will eventually correct itself. Trust that your financial advisor knows what s/he is doing. Trust that you’ve prepared for worst-case scenarios, and that you’ll be just fine.

 

Fourth, make sure you have a plan.

There’s nothing that can eradicate fear quicker than a well thought-out plan. My finance clients are generally calm right now (despite the COVID-inspired turmoil) because they’ve built an emergency savings account, placed their assets in areas suited to their risk tolerance, and have appropriately diversified their investments. They are not counting on the stock market’s performance for their day-to-day survival. A well thought-out financial plan is diverse, focused on the long-term, and well-suited to the individual. Few people can create such a plan without help from an expert, so don’t be shy about approaching a financial advisor for assistance.

 

 

 

Nothing good can come of falling victim to fear. Fear-based decisions may be disastrous, and could potentially cause more long-term harm than good. Instead, take a step back, breathe, and talk to an expert to develop a plan. You CAN conquer your fear. Just take it one step at a time.