Author: Dr. Priyank Kulshreshtha, Assistant Professor, Department of Finance and Economics, GIMS, Greater Noida

Awareness of one’s surroundings is widely recognized as a critical determinant of survival and success. Barry Eisler, former CIA Operations Officer and thriller author says that “The difference between being a victim and a survivor is often a low level of situational awareness.” Indeed, heightened awareness can improve decision-making and performance. However, what if this heightened awareness inadvertently triggers feelings of fear, anxiety, and emotional exhaustion, thereby undermining the very sense of balance or mindfulness it seeks to cultivate? Which generally happen in case of investments.

In view of the fact that financial matters are sensitive, investors are likely to be over cautious, because they are required to sacrifice their present consumption to accumulate funds for investing out of their hard earned money and hand it over to an unknown agency be it bank, post office, mutual fund or stock market either separately or collectively for its appreciation where a significant degree of risk is involved, consequently end up in being excessively circumspect. In such scenarios, any bad news impacts more than a good news which is known as negativity bias. It is a psychological phenomenon which states that negative events are more potent, dominant and contagious than positive once. In other words it can be understood as a tendency to attach more weightage to a negative news than a positive one which lead to panic and push the individual to take wrong decisions which many a time to leads to irreversible and irreparable losses. As per the report published in TOI on March 13, 2025, one out of every three calls being received by Jeevan Astha Help line run by Gandhi Nagar Police Station is related to suicidal tendencies among people due to financial losses. According to the GOQii India Fit Report 2022–23, derived from the Stress & Mental Health Study of over 10,000 Indian respondents, the contemporary workplace environment and financial instability have emerged as the two primary determinants of elevated stress levels. The report further indicates that approximately 17% of the surveyed population experiences stress specifically attributable to financial concerns.

Considering it as one of the problem it becomes imperative to identify a way out of it for happy investing. Here are few tips to be considered while investing your money.

1. Moderate Engagement with Negative Stimuli: As it is iterated that negative news impacts more than positive news this is because of human’s neurological mechanism. Our brain has an emotional alarm centre known as amygdala which has greater sensitivity to fear, loss and threat cues (Cacioppo & Berntson, 1994). These negative signals triggers the sympathetic nervous system, releasing stress hormones like cortisol and adrenaline. The human brain is evolved to prioritize threat detection, failing to which may be fatal whereas, pleasure is seen superficially because it does not demand immediate action. So, it is advisable that investors need to decide when and how much news review is required like once in day for 15 minutes. News must be from reliable source and importantly, develop a robust mind frame to deal with such negative news.

2. Prioritize Internal Locus of Control: Financial anxiety generally comes from events beyond the control of investors, like market crash, geopolitical tensions, global economic conditions etc. Trump’s tariff tantrums and his precautionist policies are the relevant examples. In this case, investors are advised to consider these factors as temporary challenge and plan your investments accordingly rather than treating it as a catastrophe.

3. Develop a long- term horizon: Warren Buffett advises: “Don’t watch the market closely… the market is designed to transfer money from the active to the patient.” Hence, define your time horizon, make periodic review points rather than daily monitoring, stick to your plan and focus only on those headlines which really matter to you.

4. Plan your investments wisely: To avoid setbacks, plan your investment with utmost care, select the investment avenues which suits best to your investment objective, diversify your portfolio, do a thorough research before parking your money, always keep a margin of safety which means buy undervalued assets, take calculative risks, build an emergency fund and generate few other income streams to have a cushion in tough times.

5. Avoid the herd and emotional reactivity: When it comes to investments, trust your own judgement and never follow market rally blindly because such movements are largely driven by perceived threat and not on actual threat so do not get swayed away with the market flows. Whenever things demand immediate action, take a pause, process all information and then react. Avoid being emotional in case of investing decisions.

By following these tips, one can avoid the chances of being stressful and anxious due to wrong financial choices. A solid financial planning with timely execution can reduce the chances of losing the money hence also reduce the mental stress arising out of the market chatter on a daily basis. Further investors must learns to reinterpret adversities to foster a learning-oriented disposition. Treat every setback in market and economy as normal thing. Markets and economies moves in a cyclical pattern consisting of various phases of growth and declines. Any adversity in the economy does not signal the fail of your plan, it might come to you as an opportunity to grow further. Thus an investor can develop an emotional resilience against all the bad news.