How to Handle Your Emotions During Stock Market Volatility

Emotional investing does exist, and it often takes hold of people who are getting into investing (or even long-term investors). However, it just is not beneficial and avoiding emotional investing will not only do you a favour, but also your investments. When volatility arises in the stock market, you may want to run for shelter immediately, but that doesn’t mean you should. 

Letting your emotions drive your investment decisions is a bad idea and is heavily frowned upon by experts. It is, however, beneficial to recognize what you’re feeling, but acting on your emotions is an entirely different story. While that may be easier said than done, there are ways to calm your nerves and handle your emotions during market volatility. 

Studies have shown that emotions can cause investors to make bad decisions, so here are some ways to calm your nerves during stressful times. 

 

Remember that it isn’t the first time

Realistically, it isn’t the first time that the market has been volatile or shown signs of volatility, and it definitely won’t be the last. That is why there is no need to worry. When the stock market starts to dive, just remind yourself that this has happened before. 

Every time the stock market has become volatile, the market has been able to recover and claim new, better highs that have benefited investors significantly. Goldberg, referring to 9/11, the Great Recession, and the stock market crash of 1987 said, “The stock market has overcome so many obstacles.”

 

Remember to breathe

To manage your anxiety, worries, or stress, it is important to remember to breathe. While that may seem trivial, using breathing exercises to calm yourself is a highly beneficial exercise and can rid your mind of worries. Remember that acknowledging your emotions is highly necessary, but don’t let them take control.

When you use breathing exercises to manage your emotions, you will be decreasing your blood pressure, slowing your heart rate, and decreasing your stress levels drastically. Studies have shown that deep breathing is one of the best-proven ways to manage your emotions and lower stress in the body. 

This is because deep breathing sends signals to your brain that tell your body to relax and stay calm.
 

Talk to an expert

Talking to/with a financial professional will either be able to confirm or deny your fears and they will be able to let you know if what you’re feeling is an accurate representation of the current market. They will be able to help you evaluate how you’re feeling, and it will also give you plenty of time to re-evaluate if necessary.

When you begin to worry about stock market volatility, speaking to a professional can be helpful, however, it is understandable that not everyone can afford a financial advisor. If you cannot afford a financial advisor, at least talk to somebody who understands and will be able to guide you in the right direction. As long as they are calm about the volatility, their advice could be highly beneficial.

Consulting a financial advisor will also help you rethink and further understand your investing approach should it need to be re-evaluated. You may be taking too much risk, or your portfolio may not be as diversified as it needs to be.

Finding the right professional to talk to is highly important, and that is where Mindful Trader is able to help. Mindful Trader is an experienced, professional, and understanding professional service that can help you understand and leave emotions out of the investing equation. 
 

Recognize the difference between your health and your finances

When you are thinking of your health/health issues constantly, it is guaranteed to have an effect on anything else going on around you. This specifically applies to investing. When you have concerns about a medical issue, it only fans the flame when it comes to other issues on top of that. 

It is completely normal for beginner, intermediate, and even experienced investors to feel a little stressed, anxious, or nervous when the stock market becomes volatile. It can become upsetting and nerve-wracking when you begin to see your money dwindling away and becoming nothing, especially if you’ve been saving for something such as retirement, college funds, a vacation, or funeral costs. 

Money is a big topic and also one of the most valuable things you can have, this makes investing an emotional process, but emotions and investing just do not go together.