Stock market volatility creating ‘a psychological effect’ on patients, Long Island experts say

Gail Williams is considering whether to sell some of her investments after watching the wild swings on Wall Street over the past week.

“It just scares me,” the retiree from Amityville said, referring to the market volatility.

Williams, 73, a former federal government employee and school bus driver, isn’t alone in experiencing fear, relief and fear again as the Dow Jones Industrial Average and other stock market indicators rise and fall multiple times each trading day. Some are so upset that they are avoiding financial-related social media posts and spending more time on leisure activities.

Mental health experts on Long Island told Newsday they are seeing more cases of investors seeking psychological help as they battle anxiety, depression, stress and fatigue since the latest market upheaval in response to President Donald Trump’s tariffs policy. 

The volatility “is creating more than just a psychological effect on the patient, it’s really changing their whole lives because every day they don’t know where they’re standing,” said Chabidou Sampain, a nurse practitioner at Stony Brook University Hospital, whose patients are over age 60.

She said her patients are redoing their wills, hiring lawyers and worrying that there will be no inheritance for their children and grandchildren.

“They are experiencing a significant amount of stress, requiring more therapy or seeking more advice,” said Sampain, who works in the hospital’s outpatient psychiatric department. She also said treatment may involve additional medication, education and therapy.

When stock prices fall, the number of prescriptions for anti-depressants and trips to the emergency room rises, according to academic research.

Two professors from Ball State University in Indiana, in a nationwide study, found that when the stock of local companies drops about 13% in a two-week period the number of anti-depressant prescriptions for people in the surrounding area increased nearly one half of 1% on average.

Two University of California professors found a marked increase in the number of visits to hospital emergency rooms from local investors experiencing anxiety, panic and depression one day after a big drop in stock prices.

Market volatility “has a dramatic negative impact on mental health,” said Danling Jiang, a finance professor at Stony Brook’s College of Business, citing the California study.

She and others advised investors to avoid looking at their investment returns on a daily basis and to maintain a diverse portfolio.

“You should have a balanced allocation between stocks, bonds, gold commodity and everything else just to give yourself a little bit [of a] hedge using different asset classes,” Jiang said.

Altering their lifestyle

Still, the Wall Street roller coaster combined with persistent inflation is leading Long Islanders to alter their lifestyles.

Katie Babbino, a project manager for a lighting company, said the changes that she, her husband and toddler daughter have had to make in the past few months have taken an economic and emotional toll.

“We typically go on vacation once a year and we’re not doing that this year,” said Babbino, 38, of Farmingdale. “We’re only buying our basic goods, a lot of diapers. We’ve eliminated all our extra spending.”

The young family also takes long walks around the neighborhood and avoids social media posts about news events to reduce stress.

Ashish Kumar, a barber in his 30s, has stopped looking at TikTok because of the constant barrage of news about tariffs.

“There’s so much misinformation that I don’t watch anymore,” the Hicksville resident said.

The numbers at the closing bell affect people from all walks of life because stocks make up a significant portion of most 401(k) retirement accounts, Roth IRA accounts and 529 College Savings Plans.

Almost 60% of Americans have a stake in the stock market, according to a 2022 survey conducted by pollster Gallup. That number rises to 89% among people with annual household income of $100,000 or more, which is below the median income on Long Island.

Locally, financial planners like Barry Shapiro have spent the past week fielding calls from nervous clients, reminding them how previous market plunges were followed by rebounds.

“People are nervous,” said Shapiro, president of Bshapiro Financial in Jericho, referring to the firm’s 200 clients. “But I tell them, ‘You have a financial plan, and it takes into account the worst things that can come along.’ People need reassurance and I try to provide it,” he said.

Shapiro and others recalled the market meltdowns of 2008 and 2020 – both of which ultimately led to record high stock prices.

Managing ‘ebbs and flows’

Psychologists also are getting more calls from nervous investors.

Thomas DiBlasi, a licensed clinical psychologist with an office in Merrick, said investors are coming in because they’re experiencing increased anxiety, depression, stress and anger.

“People may feel helpless and hopeless – and that can lead to depression,” said DiBlasi, who is president of the Suffolk County Psychological Association. He said he advises patients to remember that the markets will eventually recover and to take a break from financial news.

“Ask yourself how helpful is it to worry about it? Have a little bit of faith and acceptance to help ride the course,” DiBlasi said.

Christopher Fisher, a psychologist at Northwell Zucker Hillside Hospital in Queens, agreed, saying it’s natural for investors to feel powerless because the factors moving the markets are out of their control.

“We have to truly connect to the things that we can control,” he said. “I often use the analogy of surfing. You can’t control the waves but you can learn how to better surf, and how to manage the ebbs and flows of life.”

James T. Madore writes about Long Island business news including the economy, development, and the relationship between government and business. He previously served as Albany bureau chief.