The world is battling to come to grips with the financial and health impact of the coronavirus. It begs the question, ‘is there any chance for optimism during times of crisis?’ In short, yes, it can be possible by adopting the correct mental attitude.
Control is critical
Martin Seligman, professor of psychology at the University of Pennsylvania, suggests that there is a connection between feelings of control and optimism. Understandably, during a time of crisis, that link can become disengaged.
He explains that people should do more things that can make them feel in control, such as exercising, eating healthily, as well as speaking to friends and family through online platforms.
It can be much easier for people to become more optimistic about their own future. However, from a holistic perspective, surveys and studies have shown many people may still be pessimistic about their country’s (and the world’s) future.
To salvage the self-assuring element of control, experts have stated that while we may not live in a perfect world, we live in one that can be perfected. Events in history have shown that collective progress can be made. So, if we invest and implement in this trend, an optimistic outlook can be achievable.
Reality check
Should your investment perspectives be detached from reality, it may be tough to get through the current crisis. An approach of ‘realistic optimism’ should be adopted: it accepts that there may be challenges in our lives. It can be argued that the onus is on us to understand the type of action that may be required to achieve financial goals under these new circumstances.
Why optimism will help you
Studies have shown that there may be a possibility for investors who are focused on the future to think creatively and focus on ways which may help them achieve their financial goal(s). Here are three reasons why:
- Optimism can inspire creative thinking and the origination of new ideas.
At a time when the world’s economy is metaphorically suffocating, optimism can promote out-of-the-box thinking by investors and businesses. It may include how they can assist communities and also position themselves for a better future that may not have seemed plausible a few months ago.
- Optimism produces a tendency to act.
Optimists can block out pessimistic thinking by seeing opportunity in the future so that they can prepare and implement approaches to potentially achieve their financial goals. This way of thinking may be essential in the months ahead.
- Optimism supports perseverance when making tough choices.
When life is tough, and many believe that it may take a long time to recover, pessimism can run rampant, making it difficult to persevere, but optimism should be seen as a fundamental trait to drive you through uncertain times.
Optimism and investing
It can be said that investing may be an activity that is grounded in optimism. Basically, you’re investing in return for a positive outcome, i.e. a real return on investment that can help grow your financial security.
Therefore, it can also be argued that optimism and pessimism can influence the market; prices of unit trusts have the potential to be driven up and down daily depending on the feelings of investors instead of being based on actual company performance. If you’re feeling overwhelmed, speaking to an independent financial adviser (IFA) can help you attain an emotional balance.