Who pays?Who hasn’t been effected by the economic crisis?    And now there’s a name for what you may be feeling.   Financial Loss Syndrome (FLS).   My good friend, and financial advisor extraordinaire, Victoria Collins identified this malady in a recent article:


“FLS is a group of symptoms we observed in clients over the past year.”  Victoria explained. Symptoms include: anxiety, embarrassment, guilt, distorted thinking, vulnerability, insomnia caused by loss—not just loss of money—but of control, identity, even status.

FLS occurs in 6 stages (similar to the well-documented stages of grief):

1.      Denial—like the proverbial ostrich, you hide your head in the sand rather than look at your portfolio. Major feeling: Numbness

2.      Realization—this stage begins the moment you open your statement and realize the damage. Major feelings: pain, fear/terror, embarrassment.

3.      Anger—someone must take the blame…often it’s yourself. And it doesn’t help that the bad guys are getting bailed out.  Major feeling: fury

4.      Bargaining—this stage represents a last grasp at control. You swear you’ll do something, you’re just not sure what. “If  my stocks get to ‘X’, I’ll sell.” Or,  “I’ll stay in the market and buy more.” Major feelings: confusion, fear

5.      Depression—it finally, really hits you: you have no control.  The economy is tanking, taking everybody with it. Major feelings: apathy, lack of motivation, helplessness.

Beware the first 5 stages, warns Victoria. “This is when people make irrational decisions, lock in losses, anything to stop the pain.” Instead, she urges, “focus on what you can control, like making a budget.” Healing begins at Stage Six.

6.      Acceptance—it’s time to face the facts, figure out what you can control (i.e. spending), update your financial situation, then make a plan for the future.  Major feelings: sense of control, renewed confidence.

Being the wise advisor that she is, Victoria declares:  “Panic is not a plan. It doesn’t work.” She recommends a far better plan:

·         Turn off CNBC.

·         Grab a calculator and a yellow pad.

·         Figure out your networth and cashflow.

·         Make an appointment with a good financial planner.

·         And then, relax with a nice glass of wine, and congratulate yourself for taking action based on KNOWLEDGE, not FEAR, IGNORANCE, or HABIT.