Panic Mode

The World Health Organization declared COVID-19 a global pandemic today. Italy reported a 31% increase in deaths related to the virus. Stocks tanked, officially entering bear market territory. Negative headlines are coming too fast and furious. People are in full blown panic mode.

When humans see danger, the brain pumps out stress hormones adrenaline and cortisol. Adrenaline increases the heart rate, elevates blood pressure, and increases energy supplies. It literally allows a human to run away from danger. Cortisol is the stress hormone. It increases blood sugar and the body’s ability to repair tissues. Adrenaline and cortisol are very effective at helping us flee from danger. But they are designed to be used in short spurts and can be harmful when present in the body for long periods of time.

A bear market can be an ongoing source of stress, if you allow it. And constant media updates on the spread of the coronavirus (hint: It’s going to get a lot worse before it gets better) only add to that stress. The only thing scarier than losing money is losing your life. This is a perfect storm of panic.

Added to this stress, millions of Americans began working from home this week. Colleges and universities are sending students home to finish classes online. In Seattle and New Rochelle, NY, public schools are closed for two weeks. The NCAA basketball tournament will be played in empty arenas, no fans allowed. Public events, such as St. Patrick’s Day celebrations, are cancelled in many cities this weekend. Families forced to work and care for their children simultaneously while secluded in their homes will be facing a new level of stress.

There are steps you can take to reduce stress hormones in the body. Turn off the television and shut down your computers and phones for a few hours each day. Take several deep breaths. Breathing techniques, yoga, and meditation are effective at reducing stress levels. Make time for fun. Whether that means reading a book or talking to a friend on the phone, leisure time is important. Getting enough hours of good, quality sleep is crucial. And having a sense of humor helps. Laughter brings down stress levels.

Here is the good news. All of the bad news to date is out and cannot be dropped again. Tomorrow, the WHO cannot declare COVID-19 a pandemic because they already have. While the worst is yet to come from the coronavirus, every day we are getting closer to the end. But no one knows when the market will decide the worst is over. You won’t even notice the market turned until it recovers 20%, 30%, even 40%.

If you haven’t put on your suit of armor to ride out this market, now is the time. The ability to remain calm while others panic is a superpower for investors. Breath in, breath out, wash your hands, and try to keep a cool head through this extraordinary event. I have a feeling this is one of those times we will all remember and share stories about decades later.


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