Many investors feel significant moves in the stock market like airplane turbulence.
And like a jet dropping 250 feet in a split second, rather sharp market drops can make investors panic and cause not only mental but also physical reactions.
The research on this topic shows that some people are particularly bad at dealing with even the briefest market volatility, just like we’ve seen in the recent May drops.
Interesting, a study from the University of Zurich discovered that a 10% loss of wealth — say, a correction for someone who is heavily invested in the market — leads directly to a measurable downshifts in physical and mental health, and survival rates.
Another group of scientists from the University of California’s Rady School of Management found a “strong inverse link” between daily stock returns and hospital admissions when looking at admission records for every California hospital between 1983 and 2011.
So, how to avoid health troubles connected with trading?
First of all, stay calm and disciplined.
For instance, a popular investment advisor, The Vanguard Group, reported that the company had seen discipline among its customers during periods of market volatility.
“The vast majority of Vanguard investors stay the course and don’t trade,” a Vanguard spokesperson said.
“Over the last four years, only about 8.5% of Vanguard’s individual investor clients placed a trade of any kind on at least one day of sharp market decline.”