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Facing Fear: The Surprising Similarities Between Fear of Flying & Investing During Volatile Markets

Facing Fear: The Surprising Similarities Between Fear of Flying & Investing During Volatile Markets

December 16, 2023

Fear is a powerful emotion that can influence our decisions and actions in various aspects of life.  Two areas where fear often plays a significant role are fear of flying and investing during volatile markets.  While they may seem unrelated at first glance, there are surprising similarities between these two fears that can provide valuable insights into managing and overcoming them.  In this blog post, we’ll explore the commonalities between the fear of flying and investing during volatile markets and offer tips for managing these fears.

1.  Uncertainty and Lack of Control

One of the primary drivers of fear in both flying and investing is the inherent uncertainty and lack of control.  When you’re in an airplane thousands of feet in the air, you have to trust the pilot and the technology, just as investors have to trust their financial advisors, the markets and the performance of their investments.  In both cases, you’re essentially relinquishing control and putting your trust in external factors, which can be anxiety-inducing.

2.  The Role of Imagination

Fear of flying and investing can often be fueled by our imagination.  People with a fear of flying may imagine worst-case scenarios, such as plane crashes, while investors might imagine their entire portfolio vanishing in a market crash.  Our minds tend to exaggerate potential risks, and these imaginative scenarios can paralyze us from taking action or making rational decisions.  If we allow our imagination to take control we may very well miss out on the opportunities of a lifetime both in our travel adventures and investment growth potential. 

3.  Emotional Rollercoaster

Both flying and investing can be emotionally charged experiences.  Turbulence during a flight can trigger anxiety, just as market volatility can cause investors to experience fear and panic. As someone who has a fear of flying, this is purely driven by a personal experience that involved a microburst.  This was not a fun experience and the amount of emotion tied to this experience has negatively affected my bias of flying in general.  Emotional reactions in both situations can lead to impulsive decisions or avoidance behavior, which may not be in one’s best interest. 

4.  Information Overload

In today’s digital age, we have access to a constant stream of information.  When it comes to investing, this can be a double-edged sword.  Investors are bombarded with news, “expert opinions”, and market data.  Similarly, those with fear of flying might be overwhelmed by safety statistics and crash reports.  Information overload can make decision-making more challenging and intensify fear in both scenarios.  Too much analysis can lead us to a sensation of “analysis paralysis” which leads us to making no decision at all.

5.  Coping Mechanisms

Individuals dealing with a fear of flying and those navigating volatile markets often develop coping mechanisms.  For example, some people may take anti-anxiety medication before a flight, while others may avoid flying all together.  Similarly with investing, for those who have fears of market turmoil and crashes like 2008 may cope by sitting in less growth oriented vehicles like a stable fund or will avoid investing all together.  While these turbulent mechanisms can provide temporary relief, they may not address the root causes of fear.

Overcoming the Fear

While the similarities between the fear of flying and investing during volatile markets are clear, it’s also important to recognize that both fears can be managed and overcome.  Here are some strategies to help you conquer these fears:

A.  Education

Understanding the mechanics of flying and investing can demystify the processes and reduce fear.  Learning about safety protocols for flying or the fundamentals of investing can empower you to make informed decisions.  The action you don’t want to fall victim to is following the trends without completing enough due diligence and research beforehand.

 B. Exposure Therapy

Gradual exposure to the source of fear can be helpful.  For fear of flying, consider taking shorter flights or seeking professional help like cognitive-behavioral therapy.  With investing, start with a diversified portfolio that matches your risk tolerance and purpose of the funds.  Understand that longer term buckets of assets can be aligned with greater growth oriented strategies where shorter-term buckets of assets might want to be aligned with greater predictability.  You can gradually build your confidence and adjust risk appetite(s) along the way.

 C.  Mindfulness and Relaxation Techniques

Techniques such as deep breathing, meditation, prayer, and mindfulness can help manage feelings of anxiety in both scenarios.  These practices can be effective in reducing emotional reactions and promoting rational decision-making.  Also, understand that the purpose of the talking heads in the media are to drive emotion.  One great practice would be to limit the amount of screen time or access to media outlets during periods of greater volatility.

 D.  Seek Professional Guidance

Consulting with professionals, whether it’s a therapist, physician, or a financial advisor, can provide invaluable support in addressing these fears.  They can offer guidance, perspective and personalized strategies for managing fear(s).  As a Financial Advisor and a CERTIFIED FINANCIAL PLANNER™ professional we’re held to a which requires us to act in the best interest of our clients at all times.  With working with other professionals such as physicians, therapists, and financial advisors it’s recommended to seek out someone who has your best interest in mind. 

 

Conclusion

The fear of flying and investing during volatile markets share many similarities, including the elements of uncertainty, lack of control, imagination, emotional reactions, and information overload.  By recognizing these commonalities and implementing strategies for managing fear, individuals can make informed, rational decisions that allow them to overcome their fears and pursue a fulfilling life without unnecessary anxieties.  Whether you’re looking to take to the skies or make wise investment choices, understanding these similarities can be the first step towards conquering your fears and achieving your goals! 

Material discussed is meant for general informational purposes only and is not to be construed as tax, legal, or investment advice. Although the information has been gathered from sources believed to be reliable, please note that individual situations can vary. Therefore, the information should be relied upon only when coordinated with individual professional advice.

This material contains the current opinions of Michael Acosta but not necessarily those of Guardian or its subsidiaries and such opinions are subject to change without notice.

 Financial Advisor and Registered Representative of Park Avenue Securities LLC (PAS). OSJ: 6115 Park South Drive, Suite 200, Charlotte, NC 28210. Securities products and advisory services offered through PAS, member FINRA, SIPC.  Financial Representative of The Guardian Life Insurance Company of America®(Guardian), New York, NY. Park Avenue Securities is a wholly owned subsidiary of Guardian. Consolidated Planning, Inc. is not an affiliate or subsidiary of PAS or Guardian. CA insurance license # 0M50974. Guardian and PAS do not offer student loans to finance education nor do they offer legal to tax advice.  2022-143040 Exp. 9/24.