There are two sentiments that are said to measure the stock market and investment economy: Fear and Greed, often called the Fear and Greed Index. These two emotions tend to lead the market’s rising and falling, as they steer its directions based on people selling out of fear and buying out of greed. Investors can administer the risk of their portfolios based on the Fear and Greed Index by increasing their cash allotment when markets are trending down and increasing their equity allocation when markets are trending up. But what if we added “Gratitude” to that determining Index?
Several statistics set forth by experienced financial advisers show a key connection between living in a constant state if gratefulness and accumulating high account balances, greater investment portfolios, and an increased level of satisfaction in decisions made regarding giving and spending. One podcaster and financial advisor suggested that “By practicing gratitude, we can overcome the urge to spend on possessions that won’t increase our happiness and focus on areas like spending quality time with family and friends,” another advisor notes that “Gratitude can also help us delay gratification and avoid the impulse for immediate reward in return for more worthwhile rewards later.”
In 2022, inflation has reached a 40-year high in certain economies, but the wage growth has stayed below inflation. The increase of living costs, gripping financial conditions, Russia’s war with Ukraine, and the remnants of the Covid-19 pandemic all play roles in the economy’s currently grim condition and the predictions of its future. Global inflation rose from 4.7% in 2021 and is forecasted to increase to 8.8% by the end of 2022, but thankfully is projected to decline a bit to 6.5% in 2023 and 4.1% by 2024. The global economy growth, however, has slowed from 6.0% in 2021 to 3.2% in 2022 and is predicted to decelerate to 2.7% in 2023. This is considered the weakest growth profile since 2001. Since a global recession is defined by having two consecutive quarters of negative decline in the economy’s Gross Domestic Product (GPD) (which often serves as a reference point of the health of global economies), it is gravely predicted that we are currently on that trajectory towards an economic decline worldwide.
Census Bureau research shows that many are still currently unemployed from the Covid-19 crisis. Families are struggling to make ends meet. Food has become unaffordable and even unattainable for some, and the homeless population in just the state of California alone has grown by 22,000 over the pandemic since 2020, with the statistics showing homelessness increasing in the US by more than double what it was ten years ago. As the holidays approach, if you have survived the recent pandemic, have a warm and safe place to rest at night, and are still able to access sufficient food sources, then there is MUCH for you to be grateful for.
When planning your Thanksgiving meal for the end of this month, consider trimming the menu to having just enough for each person, rather than an excessive amount of leftover food, and remember to take a few moments to acknowledge how much of a blessing it is to be able to enjoy a special meal with the people who matter around you. If you are able to purchase, prepare, or partake in a Thanksgiving feast this year, make sure to take some time to intentionally be grateful, recognizing that many people are not nearly as fortunate.
When making your shopping spree rounds for Black Friday this year, remember that starting with gratitude for what you already have can lower the impulse to make hefty or unnecessary financial purchases because gratitude can remove us from the immediate desires that can cause impulsive decisions and allows us to focus on what matters the most and what has the most value in our lives.
While observing gratitude may not make you immediately wealthy from the practice alone, it is quite effective in helping you realize when you have enough, or even more than enough, in your life in order to avoid chasing more and more and when to know when enough is enough. Living in a state of gratitude allows a satisfying level of contentment that can prove to save you lots of money, both in the present and in the future.
It is also important to recognize the absolute enemy to gratitude and contentment: Greed. Greed is usually accompanied by a lack of self-control and unquenchable desires, and can be triggered by anxiety, worry, envy, and comparisons. Gratitude, however, is one of the most effective weapons in warring against both greed and fear. While gratitude is not currently a factor in the standard index for the investor’s toolkit in effectively gauging the stock markets as Fear and Greed are, we should consider making it one, starting with this season for gifting and giving as we begin allocating our finances towards gifts and services for loved ones and self.