There seems to be bad news on a daily basis, but remembering it was ever thus can be difficult. There is something in the phrase “ignorance is bliss”, but then how do you stay informed? Our team give their strategies for keeping a healthy sense of perspective.
Personally, as much as I love listening to the radio, during covid the constant repetition of the same bad news every half hour really got me down. I started to stream music instead and just listen to the news once or twice a day and I have continued to do that. I asked the team how they deal with constant bad news…
Ali jokingly said, “I ignore something and it usually goes away.” Joking aside, this chimes with the sentiment that whatever you are worrying about now, you can guarantee you will be worrying about something different in 6 months' time.
A strategy you can adopt to help take control of worry is to list your concerns and decide which of them you have any control over. If you can take action then do it. If you can’t influence the outcome, it doesn’t necessarily mean you can forget about it. Make a plan based on the potential outcomes of the problem. For example, our financial plans build in economic downturns and life-changing events as a stress test. We can’t guarantee the future, but modelling potential outcomes helps us show you have done as much as you can. Then you know you have done everything within your control.
Phoebe decided to use only one social media app, Instagram and only follow positive news and people who share uplifting content. There are apps and websites devoted to sharing positive news, Good News and the Good News Network, for example. You won’t be able to avoid the news, there is so much of it about, but this strategy might provide some balance.
Josh mentioned he has become concerned about the amount of misrepresentation across all media platforms; misinformation, bias, lack of context and fake news. Even organisations you may think are to be trusted get it wrong. Is the story making you worry even true? Could it be exaggerated to encourage people to read it? You will read how the FTSE has dropped X%, but you rarely hear about it going up!
I was listening to a podcast recently talking about how you only ever hear about problems on the news and never hear how they are resolved. Do you remember for a short time in the Autumn of 2021 there was a story about the shortage of lorry drivers (How serious is the shortage of lorry drivers?) It was reported for a short time then got knocked off the headlines by some other problem. Presumably. there was a solution otherwise we’d still be hearing about it, but it never gets reported. No wonder we feel hopeless when all we have is a constant supply of problems without ever hearing the solutions!
Paddy said, “I tend to limit my exposure to news because it’s so negative! If I see something whilst I’m scrolling I try not to get sucked in and just scroll past. Limiting time on my phone and the internet has really helped. We used to get a paper once a day and read it in our coffee break, now it’s there 24/7 if we want it.
In terms of my Pension and ISA, I just don’t look at values. They’re long-term investments and so short term volatility doesn’t matter at all. I’ve read a bit in the past about the psychology of investing and how people feel in times of bear markets – people can feel physical pain when markets are going down and let emotion take over rationality and when values are down it’s the worst time to sell!” (See further down for upcoming event on behavioural investing)
Of course Paddy is not near or in retirement when the value of your investments feels more critical. Even so, if looking at them every day makes you anxious then it might be better to do this weekly or monthly. In general, there are three key points to remember:-
1) When stock markets become volatile it is important not to panic, act too hastily and make decisions you might live to regret. It is okay to do nothing.
2) Stock market falls are inevitable, each year there will be a high and a low but it is unusual for a year to finish lower than it started.
3) “Time in the market, not timing the market” is what is important. It’s easy to miss gains if you are not invested. Allow your investments the time they need to play out.
You can find a very good article from Vanguard Investment here about how to cope with market uncertainty as recommended by Adam, who found it really helped him cope with the ups and downs of investing!
We are experiencing a period of economic volatility again and we know despite our best efforts to prepare clients for this eventuality you may be experiencing anxiety. We are always here to discuss your concerns.
We are holding an event in September which connects with this theme (co-incidentally in partnership with Vanguard), on the topic of behavioural investing and how our subconscious brain can affect our financial decisions. Book here!
The value of investments can go down as well as up and you may not get back the full amount you invested. The past is not a guide to future performance and past performance may not necessarily be repeated. Cashflow modelling is not regulated by the Financial Conduct Authority.