You’re Afraid, Read This.
Something is happening somewhere in the World. The stock market is jittery, headlines seem particularly scary, and now you’re afraid and feel like you need to act.
Let’s talk about what you should be doing right now:
- Control what you can control: Be super focused on this. Savings, spending, sticking to your plan, all of those are directly in your control.
- Talk to your advisor about your PLAN, not the market: Ask him or her how your plan is prepared for negative market conditions. It’s likely built to expect market corrections which A) happen all the time and B) inevitably end. The plan IS the lifeboat, don’t jump out of a lifeboat when you are in icy waters.
- Forget about market timing: There is no “good news” or “bad news” with respect to the stock market, it’s “better or worse”. Stocks don’t rally when peace is declared, they rally when things are getting “less worse”. Want to know when stocks bottomed in WW2? Right before the Battle of Midway. From then on, things slowly went in the Allies favor after years of going against them. That’s why market timing is so hard, you won’t know when the news is getting better in real time. Selling and buying back when “things calm down” is a surefire way to lose money.
- Don’t hedge the unhedgeable: there’s no reason to prepare your financial life for nuclear war, money will have no meaning. Don’t buy insurance or sell stocks before a meteor hits, you will have no one to collect it from.
- Remember the lessons of history: the worst-case scenario has a funny habit of not occurring. Humanity does not splinter in a crisis, it comes together. If the worst-case scenario does happen, see #4.
- Take a walk / watch less news: Don’t spend your entire day doom-scrolling Twitter or watching the news nonstop, you need a mental break, or it will crush you and have an effect on your health.
- Help where you can: If the World is experiencing a traumatic event, donate your time or treasure to helping those in need.
- Talk to someone: Are you trying to do this alone? Don’t. Friends, Family, an advisor, reach out and talk, humans crave companionship when they are afraid. If you are about to make a mistake with your money and have no one to turn to, give us a ring at Baird and we’ll help: http://www.locatebaird.com.
- Realize that you are living through normal history: If you could look 10, 15, 20 years into the future you would see crisis after crisis after crisis. History, it’s been said, is just one damn thing after another. Once this worry ends, another will replace it. Endure, and in enduring grow strong.
- Do Nothing: Humans are wired to act, it’s part of our DNA, but ask yourself, is doing nothing an option here? We often think that a problem can be solved with complexity when it can be easily solved with simplicity.
My friend, I know you are worried, but I hope this quick list has calmed you down a bit. Remember, there will always be a reason to sell stocks or hold onto cash because you are afraid.
No one ever said this would be easy, but you need to remember that there is a price for everything. The price you pay for growing your wealth comes from fear, uncertainty, and doubt.
Nothing in life is free, especially not money.