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Understanding Depression as an Investment Strategy


Depression is a common mental health problem that affects around 10% of the population in Britain at any one time (1). Although most people experience some fluctuations in mood, there are specific criteria that lead to the diagnosis of clinical depression, including experiencing at least five of the following symptoms for at least two weeks. The symptoms can be psychological (e.g., low mood, loss of interest in enjoyable activities, tearfulness, worthlessness, irritability, difficulties concentrating, thoughts of death) or biological (e.g., changes in sleep or appetite, restlessness, low energy). Depression tends to have a major impact on people’s functioning, such as withdrawal from social activities, difficulties at work and in relationships.

Over the years, various models have been proposed to help us understand why people become and then stay depressed. In the 1970s, Martin Seligman conducted animal experiments that are now considered unethical. By giving electric shocks to dogs, he found that dogs who consistently were given no control over their situations, developed a sense of ‘learned helplessness’ (2). This meant that they stopped trying to avoid pain and became passive in a similar way to people who are depressed.

Given the recent global economic difficulties, it is interesting to consider a parallel that has been drawn between depression and limiting one’s investments. Robert Leahy (2002) suggests that depression can be understood in terms of an ‘investment model’ (3). That is, when a person experiences a loss and develops depression as a strategy to guard against further loss. For example, if a businessperson loses money in a deal, it makes sense that he or she may be reluctant to make a similar investment again. This analogy can help us make sense of the common thinking and behavioural patterns in people with depression, as if someone who is depressed has found that trying to move on has not worked, it makes sense that they may not want to risk investing their already dwindling resources again. Leahy uses the term ‘strategic pessimism’ to explain why people who are depressed resist change in order to prevent further losses. According to this model, negative thinking is not distorted, but rather it represents a bias towards being prepared for the worst case scenario. Given this bias, the person is then less likely to engage in a full search of the possible solutions to their problem. Rather than focusing on what could be gained, the focus is on what might be lost. In this way, people with depression can be seen as similar to prudent investors, who take a low-risk approach to investments.

Using Leahy’s model of depression as a strategy to minimise further loss can help us to make sense how difficult it is to recover from chronic depression. More importantly, this model may lead people with depression to consider whether continuing with limited investment is helping them move forward in their lives.

1. The Health & Social Care Information Centre, 2009, Adult psychiatric morbidity in England, Results of a household survey
2. Seligman, M. (1975). Helplessness: On Depression, Development, and Death. San Francisco: W. H. Freeman.
3. Leahy, R. (2002). An Investment Model of Depressive Resistance. Psychology of Economic Thinking: Cognitive Processes and Conceptualisation. Available online at

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