Monday, February 5th had investors nervously concerned in fear of déjà vu from 2008. I must admit, when the market plunged 1,500 points, I was a little apprehensive myself. After that brief moment in which I let my emotions get the best of me, I stepped back to take a deeper look into my concern. I asked myself, “What is it that you are concerned about? Where is this fear stemming from?”
Fear is a strong emotion. It is one in which typically prevents us from making clear, rational decisions. After the markets went down Monday, I’m sure many of you were riddled with fear. So, what would have happened if you let that fear get the best of you and acted on impulse? Would that be the best decision you ever made? Or would it be a detrimental factor in the downfall of your portfolio?
Being an emotional investor will affect you in a few different ways – your hair will fall out or turn gray a whole lot quicker and you’ll lose a lot of unnecessary sleep. Nobody can predict the stock market. Not me or the best investors on Wall Street.
My initial moment of concern stopped me in my tracks. But I soon remembered that much like many of you (hopefully), I have a plan in place.
If there’s one lesson everyone should learn from this Monday’s stock market tumble, is how quickly things can change, turnaround and how being an “emotional-investor” could wreak havoc on your portfolio. As you can see, the stock market quickly regained ground and has started climbing its way back up.
The bigger picture here is deeper than emotion. Back to one of my questions from the beginning: “Where does the fear or panic stem from?” More than fear of the unknown, it’s the fear and lack of confidence that you may have in your investments. The best piece of advice that I can give you, is to make sure that you have a plan in place. When a scare like Monday occurs, you should be able to rest easy knowing that your plan is a good plan, and your plan, will offset any market volatility. Your long-term plan should be able to flow with market trends. It’s about having the appropriate monies allocated into different investment vehicles to make sure that if the market does crash, it won’t be detrimental to your portfolio, your retirement or your legacy.
Having a secure financial plan in place is the one sure way of knowing that you can worry a little less when the unexpected occurs.
If you’re not 100% satisfied with your plan, give me a call today so we can give you the peace-of-mind you so deserve.