As much as fees can hurt investment returns, believe or not this was the number one factor for under-performance:
Analysis of the under-performance shows that investor behavior is the number one cause, with fees being the second leading cause.
Source: Dalbar’s 2015 Quantitative Analysis of Investor Behavior
That’s right – we truly are our own enemies.
It’s all too easy to make bad investing mistakes like getting swayed by the noise, trying to time the market, or pulling money out of fear.
Having an advisor who can tackle both the numbers and emotions is worth their cost.
If you’re a financial planner or advisor, please check out Carl’s mini-course.
If you’re an investor like me, make sure your advisor is helping you beyond the how with the calculations and spreadsheets, and get into the why. Not only will your portfolio thank you, so will your future self.
Today’s guest post comes from Adam Cook. In addition to the references and resources he shares, I want to also include Mentalhealth.gov. Getting the treatment you need can make a huge difference, so please reach out.
Many people do not realize that mental illness and addiction too often go hand in hand. An addiction can cause mental illness symptoms while a mental illness can cause addiction.
Tobacco abuse is a close second for similar reasons. When someone is diagnosed with a mental illness, it is not uncommon for them to begin self-medicating with substances rather than seek proper treatments due to the stigma against mental health.
For those with anxiety, here are a few of the potential risks when it comes to addiction.
Self-Medicating in Social Situations is All Too Easy
Going out for drinks or a cigarette with friends is not uncommon. However, when someone with anxiety performs this behavior, they are often using the substance to blunt social anxiety.
Many people who suffer from anxiety get nervous in social settings and leap at the chance to take the edge off with a drink or smoke break.
A smoking or drinking habit may not seem harmful but, with repetitive behavior, it can easily become a dependency. Eventually, the person may find themselves unable to socialize without a substance of some kind, leading them down the road of self-medication and addiction.
Substance Abuse Worsens Symptoms Over Time
Though substances can dull the symptoms anxiety temporarily, these symptoms actually become worse as the habit persists.
After abusing a substance for a certain length of time, the user will experience more severe anxiety, prompting them to self-medicate with the substance again. This results in a vicious cycle and potentially puts the person in danger as “doses” increase.
It is critical that someone who is self-medicating receives treatment for both the illness and the addiction. Treating only one or the other will have little effect without tackling issues caused by the other.
Self-Medication Typically Means a Person is Not Receiving Treatment
Too many people suffer from anxiety disorders and do not receive treatment. The stigma against mental health issues prevents a number of people from even seeking help to begin with.
Proper treatment of an anxiety disorder should eliminate the need to self-medicate with therapy and possibly medication for the disorder. If you are self-medicating in place of seeking help, you should contact a therapist with experience in addiction and mental illness.
People suffering from addiction that emerges from an undiagnosed or inadequately treated mental illness require immediate treatment.
Not only are they aggravating the symptoms of their illness, but they are also putting their physical health at risk.
It is important that a treatment program tackles both the addiction and the mental illness simultaneously as they work side by side to create and amplify a person’s symptoms.
You may feel that your self-medicating is working to control your illness but in reality, proper treatment is what you need to regain control over your life. Seek help and kick the habit.
Adam Cook has a strong understanding of the devastation that can be caused by addiction. He recently lost a close friend to an addiction-related suicide. In an effort to better educate himself and to help others, he created AddictionHub.org, a site that provides addiction and mental health resources.
When he isn’t working or adding to his website, he’s prepping for his first triathlon.