Doomscrolling, emotional investing and other bad habits to avoid — plus some to try.
This article was originally published by RBC Discover & Learn.
Whether it's through meditation, mindfulness or another method of relaxing, short intervals of calmness can be rewarding. Making decisions constantly can create a kind of friction and deplete our mental energy. Even fairly routine decisions can cause mental wear-and-tear over time.
Here are six tips to help slow down your racing thoughts and calm your nerves, so you can build healthy habits and focus on what really matters to you.
1. Be a little more “Stoic"
Ancient Stoic philosophers believed that life is less about what happens and more about how we respond — and one of their basic principles is that you shouldn't worry too much about things you can't control. Marcus Aurelius famously said that he could “choose not to be harmed." That kind of thinking can benefit investors, too. Despite recent market volatility, savvy investors have learned to keep their cool amid mounting uncertainty. Let's call it “stoic" investing. The idea is to avoid letting emotions dictate investing decisions.
“When markets are volatile, emotions run high – that's human nature," Stu Kedwell, senior vice president and co-head of North American equities at RBC Global Asset Management, previously told Inspired Investor Trade. “Half the battle in deciding whether you're going to do something rash to your portfolio or not is acknowledging that there's a component to investing that is emotional," he said.
How can you keep emotions out of your investing decisions? Here are three considerations.
- Stick to the plan. Whatever that plan is, you put it in place for a reason. It should be your guiding light to help you reach your long- or short-term goals.
- Look at how often you're looking. Staying engaged is important for many investors, but find a check-in schedule that's right for you – be it daily, weekly, monthly, etc. Know that for every investor it's different.
- Losing hurts. Seems like an obvious statement, but if we can keep in mind the concept of loss aversion, which is the theory that losses hurt far more than the enjoyment we get from gains of equal value, it may help keep knee-jerk reactions in check during volatile markets.
2. Stop “doomscrolling"
At a time of great uncertainty, you might feel like constantly refreshing your social media feed will help you find whatever answers you're looking for. But this kind of frantic activity — deemed “doomscrolling" — can actually end up elevating anxiety. So relax your thumbs, step away from the screen and only check for updates during occasional, set intervals. It's one thing to check your social media and catch up on news, it's another to be consumed by a hodgepodge of information that takes you down numerous rabbit holes. When researching, be deliberate about what you want to learn and understand how to avoid misinformation.
3. Build better habits
As you resist your temptation to engage in “doomscrolling," there's another question worth asking. How do you cultivate good habits to enrich your life? The key is to start small. From fitness to learning a foreign language, incremental progress on a daily basis is what makes momentum possible. After all, marathon training doesn't happen overnight. Nor does the ability to speak or write several languages. Investing is no different. Habitual investing, for instance, can offer many benefits. What is habitual investing? Take dollar-cost averaging as an example. It involves investing a set amount over a long period, no matter market conditions. The routine can help cultivate good financial habits as you build your wealth over time.
4. Practice self-care by exercising self-control
“Self-care" has become a ubiquitous term that conjures up images of languid yoga sessions, lying in a bubble bath for hours or melting cheese over every edible thing in the house. Whatever works, right? Well, not exactly. In practicing self-care, don't neglect self-control. Before you decide to bury your anxiety in binge watching the latest reality TV hit, conscientiously prioritize the commitments that actually make your life function more smoothly. In the financial realm, this can take various forms from budgeting to saving.
5. Practice “tend and befriend"
When you're overwhelmed and not at your best, there's a clear and understandable temptation to wall yourself off and wallow. But that instinct rarely makes you to feel better. Instead, try to “tend and befriend" by turning to your social contacts for mutual support — the issues of the day likely impact them too. There are plenty of ways to practice this, including taking a walk with a good friend, calling the sibling you haven't spoken to for a while or setting aside time to catch up (like, a real conversation) with your spouse. And hey, if no one is available when you reach out, a little self-talk might do the trick.
6. Seek out even a small slice of nature
After being cooped up for too long during the pandemic, now is a good time to take advantage of the healing power of the natural world. Get outside and take in the sights, whether it's a nearby frosted forest or a lone evergreen in the city. If you can, keep your phone out of your hands; you'll feel calmer and breathe easier.
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This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.