It’s been a hard slog for ASX investors in 2022.
The S&P/ASX 200 Index (ASX: XJO) is down 10.7% year to date, but at times losses have hit 15%.
It’s never nice to look out to a sea of red in your portfolio, but arguably what’s worse this year has been the volatility.
In a matter of weeks the market has dropped 15% only to see it spike up 10% in a matter of days, giving everyone false hope.
Such uncertainty stresses humans, who crave a sense of control.
Financial expert Brian Feroldi certainly empathised with investors in a recent newsletter.
“Inflation. War. Supply chain. Interest rates. Bear market. Hurricanes. COVID.
“With so many macro concerns, it’s not hard to understand why pessimism is running rampant today.”
He admitted even the hardiest of buy-and-hold advocates would struggle to deal with this year’s “constant drumbeat of pessimism”.
“2022 has been a tough year on so many fronts. Our portfolios have been walloped. Inflation is at a 40 year high,” said Feroldi.
“How can investors keep their heads on straight when the world appears to be crumbling?”
Feroldi answered his own question with three suggestions:
1. Stop reading the news
Watching or reading the newspaper or television news is a daily habit for most people.
But following the minutiae of every event that could impact your ASX shares is unhelpful for keeping a long-term focus.
Feroldi suggests blocking out the noise.
“I haven’t voluntarily watched the news in over a decade. This has done wonders for my mental health,” he said.
“Quitting the news isn’t easy, but voluntarily watching the news is like inviting Debbie Downer into your home and asking her to talk non-stop. If the news is truly important, it will find you.”
2. Learn history
For Feroldi, people who exclaim “we are living in the worst time ever” have no idea about what previous generations have suffered.
“It’s not even close! Study history to see what life was like during the US civil war, WWI, the Cuban Missile crisis, WWII, the Great Depression, the Bubonic Plague, or the Spanish flu.”
Investors need to get some historical perspective to combat their pessimism.
“We’ve had it much worse in the past. And yet, we’ve always found a way through.”
3. Find a supportive community
If you want to be more optimistic, then hang out with optimistic people!
“Nothing lifts my mood more than communication with a tribe of like-minded optimists.”
In the age of the internet, finding others who are following the same path as you is easier than it has ever been.
Feroldi even suggested this very website is an excellent place to network.
“Twitter, Reddit, Facebook, The Motley Fool, Meetup — all are wonderful resources for connecting with people that can lift your mood when things look bleak.”
Ironically, the internet is also the reason why some people can feel pessimistic.
“The truth is that there are always reasons to be pessimistic. We’re just more aware of them today than ever before,” said Feroldi.
“History shows that human ingenuity always triumphs in the long-term, even when the short-term looks precarious.”
The post ASX shares getting you down? Here are 3 ways to fight pessimism appeared first on The Motley Fool Australia.
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Motley Fool contributor Tony Yoo has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
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