Harry Berkowitz
www.bottomlinewealth.com
Just when it seems that the economy and the financial markets have punished us enough, the torture continues- stock market relapses…disintegrating automakers…rising credit card fees… even more multibillion-dollar Ponzi schemes. All the ingredients for unrelenting financial stress.
For advice, I turned to Ari Kiev, MD, a psychiatrist, consultant and author of books, including Mastering Trading Stress, who counsels Wall Street traders on dealing with investment anxiety. He explained that most of us cope with intense fear by pretending it doesn’t exist, but such avoidance actually makes the fear grow.
What to do instead: First, acknowledge that you are scared and that you made some mistakes. Allow yourself to experience panic. This feels very uncomfortable at first- but then something surprising happens. You’ll find that even the most negative feelings aren’t so intimidating because they dissipate rapidly, usually in a matter or minutes or, at most, hours.
When drafting your investment strategy, swing for singles that will slowly improve your score, not home runs that you are much less likely to achieve. Don’t pretend that you can completely repair your portfolio overnight. At best, it’s going to take several years to make back what you have lost.
Finally Kiev says that listening to the experiences of others in similar circumstances can help you identify your own self-defeating patterns and change them to more helpful ones. The American Association of Individual Investors has local chapters around the country where small investors meet to discuss their successes, failures, concerns and ideas. Membership cost; $29/year. 800-428-2244, www.aaii.com
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