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How to Avoid Investment Stress

Investment stress can be avoided. Here is how.

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Be the emoji you want to see in the world! (Photo by AbsolutVision on Pixabay)

The hardest part of investing is controlling your emotions and overcoming the investment stress. If you don’t know how to do that, then you might sell your stocks too early because you got scared off, or hesitate to buy – and then miss a huge run-up. That’s especially important when your stocks go down in value and you start seeing a lot of red in your account. 

As always, a full disclaimer: I’m not any sort of financial advisor, and all of this is purely for entertainment purposes. I’m just a guy who went against the grain, bought everything at the near-bottom of the 2020 crisis, and tripled my money the following year. Doing that, and abandoning the safe harbor of my Amazon stock, was terrifying, and it was a bit demoralizing to see my portfolio stagnant after an initial spike (and a smaller drop) that followed. Nonetheless, I managed to hold on (or HODL on, as my ape brethren on r/wallstreetbets would put it), and got rewarded for it in the end. 

Here are three quotes that really helped me get control of my mental game and conquer the investing stress. Each of them covers a slightly different aspect. Read them, understand them, combine them in your mind, internalize them, and you just might become a better investor as a result.

First, this long but excellent quote from Warren Buffett, all the way back in his 1987 letter to shareholders:

“Ben Graham, my friend and teacher, long ago described the mental attitude toward market fluctuations that I believe to be most conducive to investment success. He said that you should imagine market quotations as coming from a remarkably accommodating fellow named Mr. Market who is your partner in a private business. Without fail, Mr. Market appears daily and names a price at which he will either buy your interest or sell you his.

Even though the business that the two of you own may have economic characteristics that are stable, Mr. Market’s quotations will be anything but. For, sad to say, the poor fellow has incurable emotional problems. At times he feels euphoric and can see only the favorable factors affecting the business. When in that mood, he names a very high buy-sell price because he fears that you will snap up his interest and rob him of imminent gains. At other times he is depressed and can see nothing but trouble ahead for both the business and the world. On these occasions he will name a very low price, since he is terrified that you will unload your interest on him.

Mr. Market has another endearing characteristic: He doesn’t mind being ignored. If his quotation is uninteresting to you today, he will be back with a new one tomorrow. Transactions are strictly at your option. Under these conditions, the more manic-depressive his behavior, the better for you. But, like Cinderella at the ball, you must heed one warning or everything will turn into pumpkins and mice: Mr. Market is there to serve you, not to guide you. It is his pocketbook, not his wisdom, that you will find useful. If he shows up some day in a particularly foolish mood, you are free to ignore him or to take advantage of him, but it will be disastrous if you fall under his influence.

Indeed, if you aren’t certain that you understand and can value your business far better than Mr. Market, you don’t belong in the game. As they say in poker, “If you’ve been in the game 30 minutes and you don’t know who the patsy is, you’re the patsy. An investor will succeed by coupling good business judgment with an ability to insulate his thoughts and behavior from the super-contagious emotions that swirl about the marketplace. In my own efforts to stay insulated, I have found it highly useful to keep Ben’s Mr. Market concept firmly in mind.”

stressed investor chewing pencil
Get in touch with your inner beaver while perusing Mr. Market’s daily offerings! (Photo by JESHOOTS-com on Pixabay)

Second, the famous Litany Against Fear from Dune, one of the best sci-fi books of all time. (And a damn fine movie, to boot.)

“I must not fear.

Fear is the mind-killer.

Fear is the little-death that brings total obliteration.

I will face my fear.

I will permit it to pass over me and through me.

And when it has gone past, I will turn the inner eye to see its path.

Where the fear has gone there will be nothing. Only I will remain.”

Last but not least, a quote from one of my favourite video games. A lot of people scoff at video games or don’t take them seriously, even though they’re about 100 times better than movies. That’s a cognitive blind spot. If 1,000 people work on something for five years, is the resulting product not an artform? But I digress – here is an excellent quote from my favourite Diablo-3 character, Covetous Shen:

“Hope… Do not look down, my friend. Even in the darkest of times, there is always hope. Hope for a better day, hope for a new dawn. Or just hope for a good breakfast. You start small, then see what you can get.”

As I am writing this, in early December 2021, the stock market is wildly fluctuating up and down, sometimes multiple times throughout the day. That is partly due to yet another new covid variant (omicron, this time), partly due to fears of inflation, partly to the irrational market euphoria starting to end. My beloved small-cap and medium-cap stocks are taking a far greater hit than the plain old S&P-500 index: I would be lying if I said I wasn’t worried, and I seldom lie. (I am, after all, a human – not a Vulcan.) But keeping these mental shortcuts handy means I don’t give into panic, I keep my stress low, and I concentrate on all the other fun stuff that life has to offer. (Today, it’s blogging, a fine meal at my favourite diner, and yet another Werner Herzog movie.)

primal scream stress man in park
Or maybe go for a walk and do some primal screaming – whatever works! (Photo by Olichel on Pixabay)

Good luck – I hope this helped you. If you do end up making some extra cash off this advice (or avoiding a great big loss), no need to thank me – just give some cash to your local charity, and maybe consider sharing this advice with those around you, eh?

What about you? What mental hacks and tricks and mantras do you use when your investments give you a scare? Leave a comment and let me know! 

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