Stop Worrying About the Stock Market. It Might Literally Be Making You Sick

Did you check the stock market today? I bet you did.

But you probably didn't need to. Did you make an important change to your portfolio? I doubt it. Was there game-changing news in any of the companies you invest in? Unlikely. There rarely is. You just wanted to look at numbers going up and down. 

It's well known that this behavior can cause bad investment results. As Buffett says, "Until you can manage your emotions, don't expect to manage money."

But it can also do a number on your health. In a new paper, Joseph Engelberg and Christopher Parsons of the University of California show "a strong inverse link between daily stock returns and hospital admissions, particularly for psychological conditions such as anxiety, panic disorder, or major depression."

Digging through California hospital admission records and stock market returns from 1983 to 2011, the two found that a 1.5% stock market decline increased hospital admissions by 0.26% over the following two days. Narrowing it down to psychological complaints like panic attacks and stress, the effect was twice as high. Literally, a declining stock market makes people sick.

It's no secret that the economy impacts people's physical health. Til von Wachter of Columbia has shown that losing a job during the worst economic downturns can reduce life expectancy by 1.5 years. Policymakers have even been know to shelter the truth lest it sets off panic and makes a situation worse. At a conference last year, former Treasury secretary Larry Summer said, "Transparency is a good strategy when things are better than expected." Jeroen Dijsselbloem, the Dutch finance minister, put it more bluntly: "When the going gets tough, you have to lie."

But losing a job or experiencing a bank run is largely outside of your control. Checking the stock market is voluntary. Even if you check the market, how you interpret a decline is up to you. Some see a big market decline as a stressful slash to their net worth. Others view it as an inevitable, unavoidable, temporary feature of markets, or even an opportunity to buy more. The same event can mean very different things to different people, and which side you fall on is entirely up to you.

Engelberg and Parsons write: "It is natural to think about the welfare implications associated with the widespread dissemination of financial information, on an almost minute-to-minute basis." This is a fair point until you realize their study uses data from all the way back to 1983, long before individual investors had up-to-the-minute market information, to say nothing of blogs and Twitter. What seems more likely is that investors seek out information that is harmful not only to their investment health, but their physical health, regardless of how easy it is to obtain. Being bombarded with market news all day may be bad, but checking the market's performance in the evening newspaper appears just as bad. What matters is that you see red. You see your money disappear. And that makes you sick.

If you check market news on a daily basis for anything other than entertainment or to seek out new opportunities, stop hurting yourself. Try to limit yourself to a once-a-week update. Once a month will likely suffice. If you're an index investor with a long-term horizon, there should be no harm in checking in even less frequently. "Mr. Market is there to serve you, not to guide you," Ben Graham, Warren Buffett's early mentor, used to say.

Turn off the TV. Put the paper down. Go for a walk. Your stocks will be just fine.


Read/Post Comments (7) | Recommend This Article (28)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On March 27, 2013, at 4:22 PM, Thaeger wrote:

    What's that old saying...'A watched stock never doubles?'

  • Report this Comment On April 02, 2013, at 2:00 PM, Darwood11 wrote:

    A watched pot never boils?

    I suggest we all go about our daily business, make money the old fashioned way (by working) and then take a portion of that "hard earned money" to contribute to our retirement portfolios via "Dollar Cost Averaging" and index funds, and go about our daily lives. (You do have a retirement portfolio, with automatic pay check contributions, don't you? If not, why not?)

    Watching the market each and every day is a great waste of time. It also makes pundits and some people rich, but usually not the watchers. ("Mad Money Cramer" is my poster child for losses by observers, who can't understand the difference between "entertainment" and "making money.")

  • Report this Comment On April 02, 2013, at 9:36 PM, TomBooker wrote:

    "Jeroen Dijsselbloem, the Dutch finance minister, put it more bluntly: "When the going gets tough, you have to lie.""

    By all means, let's enshrine DieselBomb's bon mots. He has such a knack for crafting a thought. ;)

  • Report this Comment On April 03, 2013, at 11:27 PM, thunderboltnova wrote:

    Some Mutual Funds never came back from the crash so maybe these people's worries are warranted.

  • Report this Comment On April 05, 2013, at 9:35 AM, robyrob wrote:

    @thunderboltnovaa

    Problem #1 was investing in "some mutual funds."

  • Report this Comment On April 09, 2013, at 12:04 AM, Guitarpack wrote:

    If you weren't the type of person who looked at the stock market daily, you probably wouldn't be looking at the Motley Fool or reading this article either.

  • Report this Comment On April 09, 2013, at 3:56 AM, AnsgarJohn wrote:

    We need to see intrinsic value slowly increasing. When Berkshire Hathaway stock is going down, I just think about the $12 per second in dividend they are getting from Coca-Cola, etc. I'm working on a website that should do this: www.vlnvst.com

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