This quarantine period has been referred to with many phrases: “Interesting times,” “an unprecedented situation,” and “challenging days” are just a few. While this time has been incredibly difficult for so many and these phrases will be engrained in our memories for a long time, I hope that people look back on this time and remember the lessons they learned rather than the struggles they suffered.
Some of the lessons I’ve learned through this time also apply to being a wise investor.
Lesson 1: Stressing and panic do not help.
Stressing about the virus, social distancing protocol, or shelter in place orders is completely understandable, but it does not change the situation. I have found my best days have happened when I let go of trying to control the situation and accepted my new normal. Focusing on the things I can control, like taking a walk on a beautiful spring day, helps reduce the panic of not knowing how long this time will last or if I will contract the virus. Similarly, panicking and trying to control an unpredictable market often leads to rash decisions that may not put you ahead in the long run. Remaining calm and focusing on what you can control can lead to a smoother investment experience.
Lesson 2: Heeding good advice can help.
The medical professionals and government officials are advising us to wear masks, stay six feet apart, and wash our hands often. Although I might not always want to do these things, it has been good for me to accept what the experts are saying and follow along. As financial advisors, we build financial plans to account for periods of market decline and periods of market growth. Therefore, we encourage our clients to stay the course even when they are tempted to do otherwise. We know market declines will happen at some point, so the financial plans we put together are prepared for when they do.
Lesson 3: Listening to the media can cause anxiety.
The news is constantly reporting the number of cases and deaths from the virus, the projections of how many people will get infected, and the negative impact on the economy. While it is good to be informed, too much time with the media, whether it be with our smartphones, computers or TV’s, often hinders rather than helps. For my own sanity, I’ve needed to limit the amount of time spent reading, watching, or listening to other people’s opinions about the pandemic. When it comes to your finances, there are thousands of voices trying to tell you what to do as a result of the pandemic. While many of these voices are trustworthy, it’s difficult to sort between those that are helpful and those of people who are paid to increase the number of people watching what they have to say. Our job is to help you sort through the clutter, help make the complex simple, and help keep you focused on what really matters. We are always happy to have a conversation when you have questions about how the news relates to your plan or portfolio.
I hope you are using this time to continue learning, growing in your relationships with family and friends, and staying healthy! Keep washing your hands!