Living Well in a Volatile Economy

Living Well in a Volatile Economy

An interesting thing happens to our brains and bodies when we panic or when we see others in panic mode. Based on the perception that there is danger, our primitive brain takes over from the advanced reasoning centre located in the prefrontal cortex and sends signals to the body that it’s time for action. What’s happening on a biological level is that the amygdala, an almond shaped area of the brain transmits the message to the body to release powerful hormones such as adrenaline and cortisol so that we can either run away or stay and fight. Our heart pumps blood to our arms and legs often lending us superhuman strength, this is the stuff of legends and news stories about people lifting cars up to rescue trapped friends and loved ones. In order to accomplish this, the system must shunt blood away from our brains, our digestive tract and all other functions of the body not directly involved in fight or flight. Once the danger is over, usually fairly quickly, the body systems return to normal. It’s a great system and for the most part it works really well, except of course if the danger isn’t immediate and/or life threatening and if it persists over long stretches of time.

Often left out of the fight or flight equation, but equally debilitating, is the freeze response. That’s the “deer in the headlights” thing where panic has caused a complete physical and mental shut-down and you stand in the middle of the road waiting, hoping and praying that the two ton truck coming straight at you has enough time to brake, swerve or miraculously disappear into thin air. Rather than facing it, many people will turn a blind eye and refuse to look at the possibility of impending doom moving rapidly their way, only to find that had they simply moved out of the way to think for a moment, the answer was simply making that conscious clear-headed choice to move out of the way!

For most people an economic downturn or recession, however, is not the equivalent of being chased by a sabre tooth tiger or run over by a truck nor is it a great time for our advanced reasoning creative brain to shut down in favour of surging hormones that make us feel really unwell when they aren’t being burned off fighting or running away.

So what happens when panic of the kind we see today on the economic world stage isn’t burned off appropriately and lasts far longer than most people can endure? Our bodies become overwhelmed, we suffer the effects of anxiety which can manifest as poor sleep, bad eating habits, a significant increase in smoking and alcohol consumption amongst other things, all of which lead to poor decision making. Our bodies are simply not equipped to manage the relentless cascade of stress hormones for months on end without respite. The main difficulty with unremitting stress is that it becomes habitual and very difficult to break out of. If we are to safeguard our physical and mental health as well as our economy, it becomes imperative for us to re-activate our pre-frontal cortex, our evolved, creative, thinking brain so that we can make choices from a resourceful, calm and intelligent standpoint rather than rushing into decisions that may be regretted later.

The key to staying calm and keeping the economy strong, is movement, not the rapid, instinctive knee-jerk reaction that we see in the fight or flight response, or the “bury your head in the sand” refusal to do anything at all that is the freeze reaction, but the slower, more deliberate movement consciously created with clear intention, like the unhurried, measured dance of Tai Chi. Movement away from the perception of immediate danger and the automatic fight, flight or freeze response of the amygdala and into the mindful awareness of the pre-frontal cortex creates the calm necessary to weather the storm without damage to your body or your bank account.

How you create that movement from panic mode to unruffled understanding is entirely up to you, unique to your style, your needs. Many people find that regular exercise and plenty of sleep is enough. For others meditation, counselling, supplements or some form of therapy is required. Once you’ve managed to settle your system down, it becomes much easier to make decisions that work best for you over the long term. Perhaps it’s time to reconsider where you have invested or maybe you’re thinking that you’ve got lots of time so investing now while markets are low and prices are down is a good idea. Maybe you are nearing or are at the point where you are living on your investments and security is paramount so you need to transfer over to a less volatile arena. Even taking a step back to observe from a more objective standpoint or waiting for awhile to see what will unfold constitute conscious choices or movements.

It’s important to remember that whether the market is bull or bear, that neither a bull nor a bear is chasing you. The economy is like any living organism; it has ebb and flow like the tides and just like the tide, fighting it or trying to get away from it can drown you. So remain calm in whatever manner works for you, don’t react quickly without thought or stop all actions, freeze and bury your head in the sand, rather, use your self-aware conscious mind and make decisions that work for you, slowly and deliberately go with a sense of flow and most importantly, keep it moving!