Posted by Renee Schmidt

Everyone knows that the markets; the stock market, the bond market, currency markets, etc. are defined by ups and downs.

Nowhere else does a simple up or down arrow; a plain green or a red icon, have so much immediate force and presence in the human mind. It’s as if the entire world senses and perceives that tiny red down arrow, as a sign of impending doom, or as the very bringer of apocalypse (“the end of the world as we know it”).

Because the “market roller coaster” leaves so many people in a state of confusion, and is building fear of a double-dip recession, I found it pertinent to focus on the positive and lend some insight.

One particularly interesting Economic theory is the “Lipstick Effect”.

The “Lipstick Effect” is pretty easy to explain and can be conveyed, in three steps:

  1. When there is an economic downturn, or even the suggestion of “being in the red”, people cut back their spending on high end luxury goods (goods that aren’t necessary to everyday life).
  2. Because the ladies have stopped purchasing GUCCI handbags and expensive sunglasses, despite the hard times, women now have extra cash that they are clearly going to want to spend.
  3. Instead of saving all of this extra cash, as an insurance policy during the possible recession, women rationalize the expenditure of the excess money and feel comfortable purchasing more lipstick than they usually buy, hence; the “Lipstick Effect”.

Now if this sounds like complete nonsense to you, consider that after 9/11, a time that we can all say was a time of definite uncertainty, Estee Lauder saw a huge jump in lipstick sales.

Across America; they doubled.

While economics does a supreme job of explaining the monetary side of human behavior; it is generally lacking in a vivid conception of “why” such behavior occurs.

This is where psychology excels.

I believe that due to such instability in the markets, people begin to become increasingly nervous, to the point that they begin falling apart emotionally.

In order to compensate for this inner turmoil, women find the need to splurge on lipstick; probably the most prominent and noticeable type of makeup, as a way to keep their outer selves pretty and arranged.

I’m a sincere believer in using a little makeup, to highlight the beauty a women already has.

Because of this, I see no excuse as a bad excuse to invest in makeup.

That being said, women have to realize that no matter how attractive and appealing the exterior is, the chief object of importance must always remain the interior. If market news makes you nervous, then just don’t watch the news or read the finance section of the paper.

Being a woman in business, in the 21st century is just as much about, being a strong role model for your peers, as it is about knowing yourself well enough to direct yourself towards the positive.

But remember, a quick trip to Sephora never hurt anyone (even if you’re a motorcycle woman and getting there on a bike ;) )!

Photo Credit [Via,Via]