《TAIPEI TIMES》 Psychiatrist offers tips to manage trading stress

A person observes Taiwan's stock market chart at the office of the Taiwan Stock Exchange in Taipei. Photography: Ritchie B. Tongo, EPA

Author: Lo Pi / Reporter

Psychiatrist Yang Congcai yesterday provided advice on coping with the stress caused by stock market fluctuations.

Taiwan stocks posted their fourth-biggest single-day point loss on Friday, closing below 40,000 points after an overnight selloff on Wall Street, even as the market recovered from session lows on hopes that the government might introduce measures to support the stock market, traders said.

Taiwan's weighted index fell 1873.08 points, or 4.51%, to close at 39701.64 points, with an intraday fluctuation range of 37837.05 points to 40435.83 points.

The transaction volume reached NT$1.32 trillion (approximately US$4.028 billion).

Falling stock prices take an emotional toll, in part because of loss aversion, where the pain of losing money is greater than the pleasure of gaining an equal amount of money, Yang said.

Worry about holding on to depreciating stocks or seeing retirement savings shrink before actual losses are a form of anticipatory anxiety, he said.

Rushing to invest after seeing others make money may stem from a fear of missing out, turning investment decisions into emotionally driven reactions, he added.

When the brain sees a sharp drop in stock prices as a threat, it may trigger the release of stress hormones, leading to increased heart rate and blood pressure, faster breathing and muscle tension, Yang Congcai said.

Those who continue to calculate profits and losses or ruminate on missed buying and selling opportunities after the market closes may have difficulty relaxing, which can lead to insomnia, irritability and difficulty concentrating, he said.

Yang Congcai offers advice on dealing with the stress associated with stock market volatility.

First, set a regular time to check stock prices instead of picking up your phone every few minutes, the psychiatrist says.

"Stay away from market dynamics and relax," Yang Congcai said.

Second, practice abdominal breathing when you're stressed — inhale for about four seconds and exhale for six seconds for three to five minutes, he said, adding that there's no need to forcefully hold your breath.

Third, exercise regularly and engage in activities such as brisk walking, cycling or swimming to help relieve stress and improve sleep quality, Yang Congcai said.

It's important not to sacrifice sleep to keep up with market trends, he added.

Fourth, identify catastrophizing thinking and discern whether worries stem from actual financial losses or imagined worst-case scenarios, he said.

If necessary, cognitive behavioral therapy may help develop healthier thinking patterns, he adds.

Fifth, manage financial risks and avoid excessive leverage, Yang Congcai said.

Sixth, maintain social connections and activities outside of trading, he said.

If insomnia, anxiety, panic attacks or heart palpitations persist and begin to interfere with work or daily life, a doctor should be consulted for evaluation, testing and treatment, he said.

Symptoms such as chest pain, difficulty breathing, cold sweats or fainting should never be ignored, Yang Congcai said, adding that anyone experiencing such symptoms should seek medical attention immediately.

Additional reporting provided by CNA

News source: Taipei Times