Do significant; sudden wealth losses have an impact on mental health? We examine the effects of substantial wealth losses on mental health among older U.S. adults using exogenous variation in the 2008 Health and Retirement Study interview dates. We compare cross-wave changes in wealth and mental health for respondents interviewed before and after the October 2008 stock market crash.
The crash reduced wealth, increased feelings of depression, and increased the use of antidepressant drugs. These effects were most substantial among respondents with high stock holdings before the crash. These findings suggest that sudden wealth losses result in immediate drops in subjective mental health measures. We find no evidence. However, that wealth loss causes increases in clinically validated measures of happiness.
Mental health And The Stock Market
As we know, the stock market is like an addiction. Once went into it, you cannot come out. People invest, lose money, and still don’t stop, ultimately bankrupting themselves.
In today’s world, money plays a very vital role; everyone judges you with your bank balance these days. Even we all invest in the stock market in order to get something in return, right? But due to the uncertainty of the stock market, we receive depression, sadness, and anxiety in return. Talking about anxiety it is the most common thing you will face if you invest in stocks on a daily basis.
Casual investors — those with jobs unrelated to finance — may also be impacted. People anxious about money may become obsessed with checking their bank balance or the changing principles on their outstanding loans. Work performance can make you suffer, especially for young people: more than a quarter of self-described millennials say financial stress affect their job performance, twice the national average. Economic anxiety is frequently blamed for physical illnesses or depressed moods among people in their late twenties and early thirties. And millennials aren’t the only ones affected by a market downturn. When stocks fall, children become ill: they are hospitalized more frequently, stay home sick more regularly, and report more health problems.
Financially, feeling out of control can cause significant anxiety in any investor, large or small. The effect of “recession depression” is natural. Sixty-nine percent of young employed Americans are concerned about income insecurity regularly, and 67 percent are worried about having saved too little. Over half of today’s millennials are worried about losing their jobs. Over 40% are concerned that another economic downturn or major recession will leave them with insufficient time to rebuild their retirement savings. Recency bias, a cognitive heuristic in which we overestimate the significance of the most recent period in time, is partly to blame for this investment-related anxiety.
Make no mistake: money is always a source of stress, whether you’re well-off or struggling to make ends meet. Because it’s so impossible to predict what the market will do tomorrow, it’s critical to look after yourself today, both mentally and emotionally.