Got Economic Blues? The Fear/Avoidance and Mass Contagion Effect

It is hard to not be effected by today’s economic crisis.  This is not surprising when you consider that money and finances are intimately tied into your survival instincts.  On a basic level, any threat to your financial stability can feel like a direct threat to your survival.  On a deep level, some part of our brain and psyche translates the current crisis into a sense of danger that tells you to protect yourself at all costs.  Your nervous system charges up through an ancient process of “Fight or Flight,” surging adrenaline into your body to deal with the threat.  This process works great when you are dealing with an actual overt threat, like fleeing from an attacker or turning around and fighting if you get cornered.  But how well does this basic survival system work when the “threat” is out of your hands, stemming from the vagaries of the financial markets ups and downs?   It turns out, not so good: you can get caught up in your fear with a growing sense of feeling trapped, hopeless, and are at risk for making poor fear-based decisions.

In this case you experience threat but no obvious actions like fighting or fleeing are really viable.  An example of this
conundrum was on full display in the financial world the past week: panic and hopelessness resulted in wild selling and market swings!  People tend to take action with things they have direct control over, like their stocks and bonds, risking making quick or impulsive decisions that can affect the market.  Remember, the natural tendency when in the face of fear is to AVOID the thing you are afraid of (see Fear and Avoidance Cycle) .  In this case by avoiding fear, you may seek to make, on hindsight, impulsive financial changes so as to feel safer and more in control.  As you succumb to this process, fear saps the mental resources needed to make clear, rational decisions and a kind of mass confusion or mental CONTAGION may result, fueled by a vicious cycle of fear and avoidance.

Contagion has two parts: the first part is the way fear and hopelessness affects you personally by causing a kind of mental snow ball, resulting in inner contagion where threat eventually takes over your decision making process. The second part is the way contagion affects the people around you—pretty soon everybody gets caught up in the fear and then you copy what others are doing!  This mass contagion is fed by collective fear and the understandable desire to avoid threat or reduce risk (again avoidance can be a good choice when confronted by a clear threat where you can take obvious steps toward safety).  The end result is you may copy the behavior of your equally anxious neighbors, themselves very likely trapped by the contagion of the fear and avoidance cycle!  Although you may like to think that you are a self-determined and rational being, in times of financial panic you may start to behave more like our four footed cousin, the cow, complete with the herding instinct to follow what the other guy is doing!

So how do you make better decisions and deal with fear, avoidance, and contagion?  You need to clear your head and take care of yourself on an emotional level!  You may become not only fearful and panicked during times of economic upheaval, but also trapped and demoralized, producing painful states of hopelessness and even depression.  Address your distress!  You need to tackle these feelings and resist the urge to make spur of the moment decisions out of fear, panic, and demoralization.  Remember, emotional upheaval does not always produce the best decisions!  Clear your head with exercise, especially any type of cardio vascular exercise for 20 to 30 minutes a day, even walking is fine.  Begin a simple practice of meditation—a focus on your breathing can be very calming (just take 5 minutes a day and focus on the simple in and out of your breath to calm down).   Refrain from excessive intake of alcohol or prescribed tranquilizers.  Both of these substances will further impair your judgment and cause poor decision making.  We all need a little extra help during times of upheaval.  Seriously consider talking to a professional about your distress.  Talking about your distress can help you clear your mind and make better decisions.  For more information on the latest methods for reducing distress and
living a more care free life, go to www.docericryan.com.

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