By Rick Kahler
NEW YORK (AdviceIQ) -- Two economic indicators suggest that the U.S. economy is recovering from the recession. The housing market is almost back to 2006 levels in most areas of the country. We also see frequent near-record highs for the Dow Jones stock index.
Yet according to a recent survey by Money magazine, many people still feel anxious about their finances. They may be more optimistic about their own current circumstances, but still worry about their future or about the economy in general.
This continued anxiety, despite a rosier economic outlook, may not seem logical. When you take a closer look, however, it makes perfect sense.
For one thing, people who suffered job losses, foreclosures or other financial setbacks during the recession didn't necessarily recover emotionally even if they recovered economically. Like other traumatic life experiences, painful financial experiences can leave lasting emotional damage.
In addition, even those that the recession did not directly harm financially were affected emotionally by the alarming economic headlines. Our brains have evolved to react to threats with immediate action, so these news reports triggered a fearful urge to "do something now."
Unfortunately, some investors panicked and did something: selling out of the stock market at the bottom. Maybe this reduced their anxiety in the short term, but it increased anxiety in the long term as they wrestled with when to get back into the market. Even some who did nothing still experience a lingering sense of stress.