Finding Stability in Uncertain Times: How Elections, the Stock Market, and Mental Health Are All Connected

Election season can feel like a perfect storm of unpredictability. For many, this period brings anxiety about what lies ahead—not just in terms of leadership, but in how the economy and their personal finances might change. In fact, according to the American Psychological Association, over 50% of Americans report that elections are a significant source of stress.

Add financial concerns, and you’ve got a cocktail of emotions that can impact mental health.

In this post, we’ll break down:

• How elections impact the stock market

• The connection between financial uncertainty and mental health

• Practical ways to prepare financially and emotionally

• How to build mental resilience in uncertain times

1. The Election and Stock Market Rollercoaster

Election Cycles and Market Fluctuations

Historically, markets respond to election outcomes, often with increased volatility around presidential elections and key midterm races.

Why?

The stock market craves stability. The financial world responds to expected (and unexpected) changes in leadership, party control, and policies that could impact industries from healthcare to tech.

For example:

• Pre-Election Volatility: In the months leading up to elections, markets typically see fluctuations due to the uncertainty of potential policy changes.

  
  

• Post-Election Stability (or Instability): After the election, markets sometimes stabilize as policies become clearer. However, this can also mean significant shifts in sectors affected by new or changing regulations.

A study by Forbes revealed that during recent election cycles, 70% of investors reported feeling anxious about their portfolios.

So, if you’re finding it hard to focus on anything but your investments lately, you’re not alone.

2. How Financial Stress Impacts Mental Health: The Real Cost of Uncertainty

The Anxiety of Financial Unpredictability

Money and mental health are closely intertwined. According to the APA, nearly 65% of Americans report that money is a leading cause of stress. During election years, this stress is compounded by concerns over job security, inflation, and the potential impact of new economic policies. When finances feel out of control, it can lead to a range of emotions, from anxiety to depression. This is especially true during election cycles when major changes seem imminent but entirely unpredictable.

The Cost of Constant Vigilance

The relentless monitoring of stock portfolios, checking news feeds for market updates, or refreshing headlines for the latest polling data? It’s called “hypervigilance,” and it’s mentally exhausting. This state of heightened awareness can cause burnout, disrupt sleep, and even impact our relationships. While a certain amount of caution is beneficial, constant hyper-vigilance can drain our mental health, especially when election season stirs up volatility.

3. Financial Preparedness: Tips for Staying Steady in Election Seasons

Fortunately, there are ways to weather financial uncertainty during election cycles while maintaining a healthier mindset. Here are some strategies to try:

A. Diversify Your Portfolio

A diverse portfolio tends to be more stable because it spreads risk across various investments. By balancing your assets across sectors, you’re less exposed to the risks that might affect one particular industry during a political transition.

B. Avoid “Panic Selling”

During volatile times, some people feel the urge to make sudden changes to their portfolios, often selling assets due to fear. However, history shows that markets tend to recover, and staying the course can prevent regret later. If you’re uncertain, consider consulting a financial advisor instead of making rushed decisions based on short-term election cycles.

C. Create a Budget Buffer

Prepare for economic uncertainty by building an emergency fund if possible. Having a cushion can make it easier to manage unexpected financial strains, helping you feel more secure, even during politically charged times.

4. Mental Health Tips for Election and Finance-Related Stress

The good news?

There are ways to stay grounded and prevent financial stress from impacting your mental health.

Practice Financial Mindfulness

Staying financially mindful is all about taking one step at a time. Financial mindfulness means consciously checking in with yourself about what you’re feeling and deciding what, if anything, you need to act on today. Regularly engaging in financial check-ins can help reduce stress and keep things in perspective.

Limit Your News Intake

While staying informed is important, a constant flood of news can feed anxiety. Schedule specific times each day for checking news and market updates, rather than allowing it to be a constant background noise.

Focus on What You Can Control

One of the best ways to combat election and financial anxiety is to focus on the things you can control, like your spending, savings habits, and how you allocate your time. Setting small, manageable financial goals can help you feel more in control during unpredictable times.

Consider Therapy for Financial Stress

Financial stress is real, and it’s okay to seek help for it. Therapy can provide tools to manage financial anxiety and help you develop a healthy relationship with money. Cognitive Behavioral Therapy (CBT), for example, is effective for managing the types of intrusive thoughts that often come with financial stress.

5. Finding Stability in Uncertain Times: You’re Not Alone

Remember, you’re not alone in feeling anxious about election season. Millions of Americans report that the combination of political and financial stress can feel overwhelming. But there’s also hope. Financial uncertainty doesn’t last forever, and markets tend to find equilibrium over time.

If you’re feeling the weight of it all, take a deep breath. Reach out to your support system, whether that’s a friend, a financial advisor, or a therapist. Sometimes, just sharing your worries can lessen the burden. Holding onto your sense of stability through small, proactive steps will not only help your finances—it’ll support your mental health.