A 2011 study was conducted using hospital records in California. After a three year assessment of the data collected from the study, there was found to be an inverse relationship between the number of hospital admissions and the daily stock returns.
The results in the study were not particularly shocking. The study confirmed that fluctuations in the stock market have a direct impact on investors’ health. Conductors of the study realized that the increase of hospitalization rate in the state of California could be tied back to low stock prices two days earlier. Issues relating to mental illness were found to be prominent during this period. Therefore there was a conclusion that investments affect the well-being of the investor.
The Crypto Connection
As mentioned earlier, these findings were not shocking. Fluctuations in prices affect everyone’s mood. When prices dip, we often become sad, resented, depressed and sometimes angry. In fact, you would be abnormal if you don’t feel anything. The point is, the same can be said with cryptocurrencies.
The report also backed an observation made in 1987 when the stock markets crashed on a global scale. You can imagine the number of hospital admissions worldwide. Issues of mental health were exceedingly rampant.
More studies probing this phenomenon have been conducted and have given even more accurate findings onto possible causes of such health issues. An even more intensive research sought out to answer more questions on the affected individuals. It found that individuals who have large stock holdings are particularly more likely to be affected by mental health issues than the rest.
To paint a statistical picture of the situation; the research showed that if respondents lost $250,000, chances of a depression hitting them increased by 50%. While this research targeted the broader market field, cryptocurrency market is within this boundaries. Market bubbles and burst affect us all in the same way it does to stock investors. A significant drop in crypto prices undoubtedly shakes investors into stress.
Crypto Volatility = A Roller Coaster Of Emotions
With crypto, however, it’s slightly different. While the stock prices can be expected to fall due to economic performances, crypto’s dipping is largely unexpected. Hence investors more likely to suffer.
Bitcoin has been known to reach massive peaks and drop in equal margins unpredictably, same with other cryptocurrencies. So what does it mean to your mental health as an investor?
When making decisions on something as rewarding yet risky as bitcoin, the decisions are bound to be hard. In the past, investors have faced quite a lot of anxiety with the bubbles and burst that have rocked the crypto markets.
It’s vital that you minimize the mental and psychological toll you are giving yourself. Ask yourself these three questions as recommended by Merriman Wealth Management’s founder Paul Merriman;
• Has the investment affected my sleep?
• Have I started following financial news constantly?
• Have I started worrying about the future when I watch the financial news?
If your answers are yes, then know that there is more at risk than you know.
Money And Happiness
You see, money and happiness is a complicated relationship. While levels of happiness decrease when money is lost, the opposite is not necessarily true. And a study in 1978 backs this conclusion.
Major lottery winners were put to test in a control group and their happiness compared. If was found that:
• Their happiness level wasn’t more than the group’s
• The lottery win didn’t raise their happiness level and they had before the win,
• They started becoming less happy with ordinary tasks.
Now, think about that.