Keep calm and invest wisely
Canada Life - Mar 18, 2022
Understanding market volatility and market cycles in geopolitical situations can help you make rational decisions about your investments.
Russia’s invasion of Ukraine has sent emotional and financial shock waves across the globe. Naturally, the ongoing crisis may cause you to worry about how this will impact your friends and family or your investments. I’m here to help you ease those anxieties.
As conflicts brew, uncertainty of what the future will hold can be nerve-racking. But, if history is any indication, market pressure will be temporary. During these times, it’s important to stay invested to help take advantage of market recoveries. History teaches us that stock market rebounds can happen quite quickly.
To illustrate how quickly the markets could recover from devastating events, let’s travel back in time. Historically, geopolitical events haven’t had long-lasting impacts on the global economy or financial markets. For instance, the terrorist attacks on September 11, 2001, and North Korea’s ballistic missile test in 2017 both rattled global markets. Fortunately, in both cases the markets regained those losses within a few months.
Understanding the market’s natural cycle
Markets will always fluctuate, whether because of geopolitical issues, interest rate changes or even investor expectations or perceptions. Luckily, long-term trends show us stock prices continue to rise despite dips in the market. As well, when markets fall, it could be a good time to invest because after a fall, there are increases in spending, fewer layoffs and other factors that can help markets rise. Or you can choose to hold steady and wait to make decisions until after the situation settles.
How to cope with mental and emotional stress
During high-stress times, consider these 5 ways to help regulate your emotions, and avoid panic and rash decision making:
- Manage your exposure – Limit your screen time to avoid doomscrolling through news articles and social media channels.
- Take care of your body – Physical activity is helpful for your mental wellbeing. Establishing healthy habits like eating a nutritious diet, drinking enough water and getting enough sleep are ways to protect your mental health. Other strategies include picking up a hobby or trying practices like meditation, or yoga.
- Maintain your routine – Routine offers consistency, which is helpful for your mental health, especially in times of uncertainty. It can assist you in dealing with change, forming good habits and reducing stress.
- Interact with others – Connecting with others is linked to lower levels of anxiety and depression, helps regulate emotion and even improves our immune system. Talking to friends or family about what’s on your mind can help reduce your worries and reveal you aren’t alone. Alternatively, journaling is helpful for getting your thoughts off your chest.
- Consider how you can help – Contributing to the cause can help you feel connected and offer a sense of belonging. There are many organizations you can donate to such as the Ukraine Humanitarian Crisis Appeal, or you can offer support to your local Ukrainian community.
I’m here to help you avoid emotional investment decisions. If you’re worried, I'm always here to talk. My thoughts are with those directly and indirectly affected by the devastating activities in Ukraine.