Holy Crap! What a week in the financial markets. 500-1,000 point swings daily! Anyone who started investing in the last 8 years or so- Surprise! The stock market goes up and down! You enjoyed an amazing run up with limited volatility. Now all of those hypothetical questions you answered about how you would react if the market pulled back 10%, 20%, 30% might not be so hypothetical in the near future!
The standard financial planning responses to these moves are:
- Stay the course
- Stick to your plan
- You’re a long term investor
- This is normal
- Refer back to your investment policy statement
I endorse all of these but they don’t actually make you feel better.
Your brain says I got it, but your stomach, well,not so much.
I know because I feel the same way.
When the market goes up, we all love it but don’t pay that much attention.. However on the way down…we can’t get away from it. Headline after headline scrolls. It’s literally the worst. None of the standard responses help at all.
So what should you do?
Here are 3 tips I am using to get me through these tough times. They are simple and effective. Hope they can help you too.
- Flip the switch. I started rooting for the decline! I know the markets can’t go down forever so to confuse my stomach and brain I started cheering it on. It helps that I am still accumulating wealth so the cheaper the markets get the more I can buy with my money. Go Go Go!
- I started looking for opportunities to rebalance my portfolio. Over the last 8 years I have let my winners run. I’m sure you have too. So now is a great time to check in with my portfolio. I know that I am UP big time and haven’t even thought about rebalancing over the last few years. Well, now I have the opportunity to reset! I might be down over the last week, but I know that if pull up a statement from last summer or 2016, I will be very happy. If you are older and not accumulating much any more, this is even more important to you. You need to keep your risk in check and a pull back allows you to rebalance.
These two tips give me a chance to take back control of my investments. They have been on auto-pilot for quite some time.
The market will do its thing and you have that bad feeling in your tummy because you feel helpless. So root for the decline and/or take this opportunity to rebalance. Own it!
Oh the third tip
3. Go watch your favorite tv show on netflix for the next 30 days and don’t open your statement fo the next 3-6 months. 🙂 Works every time!
3.5 Here is a kitten video to make you smile.
-Jared
