Tags: stock | market | emotional | disorders

Taiwan Study: Stock Market Declines Trigger Emotional Disorders

By    |   Tuesday, 18 February 2014 07:58 AM

Do drops in the stock market drive you crazy? If so, you aren't alone.

A study by three Taiwanese academics, published in the journal Health Policy and Planning, found that sliding stock prices sparks an increase of hospitalizations for mental disorders in their country.

Studying the period between 1998 and 2009, the researchers discovered a low stock price index, a daily fall in the stock price index and consecutive daily falls in the stock price index are all associated with greater mental-disorder hospitalizations,

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Specifically, a 1,000 point fall in the Taiwan Stock Exchange Capitalization Weighted Stock Index (TAIEX) was associated with a 4.7 percent daily increase in mental-related hospitalizations.

A 1 percent drop by the TAIEX in a single day increased hospitalizations by 0.36 percent.

"Stock holdings can help people accumulate wealth, but they can also increase mental-disorder hospitalizations. In other words, stock price fluctuations do drive people crazy," the study authors wrote.

So what's the solution? Invest in bonds? Invest in hedge funds? Give it all up and move to a deserted island?

"Our results suggest that, if someone is undergoing stressful and depressed conditions or has a mental illness, they should be encouraged to pay less attention to daily stock market movements, particularly middle-aged people who are suffering various pressures coming from job security, family and investments," one of the study's authors, Chung-Liang Lin of Dong Hwa University, said in a statement.

Investing can be stressful for anyone, especially when markets take a dive. Perhaps the best way to keep stress at a minimum is to maintain a diversified portfolio — stocks, bonds and perhaps commodities and real estate. And don't take any more risk than what makes you comfortable.

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Do drops in the stock market drive you crazy? If so, you aren't alone.
stock,market,emotional,disorders
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2014-58-18
Tuesday, 18 February 2014 07:58 AM
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