How to relax when things get messy

It feels as if life is more intense now than twenty years ago. There are more people, more traffic, more events and more news. A constant stream of information flows through our mobile phones and every time we buy something, it is more expensive than the previous time. There might be an element of age involved. The older we get, the broader the spectrum of responsibilities. Another potential reason for our increased anxiety is social media. It is almost impossible to relax when your phone constantly updates you on the news around the world. Inevitably, the majority of the news is negative, and although it does not necessarily have a direct impact on your life, it still makes you worry.

The good news is that although we may think otherwise, people’s lives are actually getting better on average. Owing to advancements in medical technology, child mortality is much lower than just a few decades ago (see graph); your children will live to be a hundred years old, never develop cancer, and previously irreversible conditions like blindness will be cured. It is also a fact that many more people now live above the poverty line than a few decades ago.

Two of the most talked-about worrying factors currently are climate change and market volatility. Consider the fact, however, that the earth is actually overdue for another ice age; but thanks to the amount of carbon dioxide mankind’s activities have pumped into the atmosphere, we have actually avoided being frozen by now. Unfortunately, the fact that we are so good at causing global warming does upset our weather systems a bit. So perhaps we should do what we can to live in harmony with nature; but the future of our climate is determined by way bigger cosmic cycles than our human activity.

If we consider the much more manageable problem of market volatility, we have to take some comfort from the fact that what we are witnessing now, is not unusual. If we look at the S&P500 Index in the USA since 1928, we can see that there has been a period of negative returns (drawdowns) in every single year, but we have still had a positive close for the majority of them. The thing to do, is to stay calm. Take precautions and implement a plan. Then test your plan by going away for a couple of weeks to a place where you have no internet signal and little interaction with other people. If you come back relaxed and people tell you about the storms that washed away bridges and the markets that fell by 7%, but your house is still standing and your investments are still positive – stop worrying. If you have been affected by the chaos, then work on your plan.

We use cookies to improve your experience on our website. By continuing to browse, you agree to our use of cookies