Weekend Reading: Portfolio PAIN Isn’t a Four-Letter Word

This article appears as part of Casey Weade's Weekend Reading for Retirees series. Every Friday, Casey highlights four hand-picked articles on trending retirement topics and delivers them straight to your email inbox. Get on the list here.
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Weekend Reading

Believe it or not, your body’s reaction to pain can also lend to sound investing advice.


A balancing act: While your default state of being is what’s known as “homeostasis”, finding an equilibrium of pleasure and pain is a never-ending rat race. Following a dopamine overdose, such as a sugar crash, your body frantically works to create a more settled scene for your overall microbiome. Further research on this is found in Dr. Anna Lembke’s book titled, Dopamine Nation, where she studies how various addictions compare to a pendulum of pleasure and pain. The not-so-surprising results? Addiction (an overwhelming amount of pleasure) leads to massive pain.

No pain, no gain: In reverse order, however, an intriguing discovery can be made. Dopamine developed by pain can, in some cases, be a positive. For instance, exercise initially has a toxic effect on your cells. Then, it actually begins to increase the neurotransmitters involved in positive mood regulation, such as dopamine and serotonin.

In the case of investing, this same concept can be applied. Selling your stocks during a short-term dip might create an initial rush of dopamine, but your portfolio may never recoup the loss. On the other hand, having the long-term mindset to work through the pain of volatile moments can bring profitable payoff. As Anthony Isola says, “Short-term torture eventually morphs into self-correcting market homeostasis, producing sustainable pleasure.”

My two cents: In a world where everything you could ever want is at your fingertips, could all this pleasure and convenience actually be leading you down the road to more pain in the long-term?