No matter where you look, there’s very little positive financial news right now. Inflation is soaring. Markets are tumbling. Supply chain issues continue. You’re probably wondering if this time is different. Let’s take a look at this current investing environment and share a few of the things we’re telling our clients.
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We are seeing less than favorable signs across markets and throughout our investments, and many people are ready to panic. It’s hard to avoid getting emotional when looking at your account value right now, but let’s take a step back and keep a little perspective.
We’re going to use this podcast to share a few of the things we’re telling our clients to remind them to stay level-headed during a turbulent market. If you can use a little reassurance, then give this episode a listen.
Let’s start off with a statement that might raise some eyebrows: a market crash isn’t a bad thing. We refuse to look at this as bad news. Instead, we see it as an opportunity. The things that you want to invest in are now on sale so why wouldn’t you want them to go down in price? Depending on where you are in life, this could be a great chance to build your portfolio at a discount.
It’s all about perspective and keeping emotions in check. Even when markets are going up, we tell clients to plan on giving some of those back. That’s part of our job to manage emotions and it happens in good and bad markets.
Another thing we’ve learned is that investment markets aren’t linear. Much like life, there are highs and lows, but over time it’s upward sloping. You have to be able to accept the down periods as part of the process. The good days will greatly outweigh the bad days over the long term and that’s what you have to keep in mind.
One way you can look at the market is like it’s going through a tough medical procedure. The pain of recovery is often worse than the pain before the operation but the key is to stick through it. Don’t panic and don’t give in because things will get easier with time. You want to approach the market similarly because it can be painful at the beginning of a market crash but history tells us that the market will return if we can remain patient.
The last thing we want to remind clients about during these tough times is that we factor in the down years to our planning process. If your plan isn’t taking these swings into account, then it’s not doing its job. We make sure the highs and lows are accounted for and that the plan is built to sustain all types of markets.
Hopefully you’ll feel a little better after listening to Dan’s perspective but let us know if you’d like us to look through your portfolio and see if it’s built for a down market.
As you listen to the show, keep an ear out for these key topics:
[2:15] – Markets dropping isn’t a bad thing
[4:10] – Markets aren’t linear
[6:27] – Like a difficult medical procedure
[8:31] – This is factored into your plan
[10:00] – Moments like this are normal
The Full Picture:
“What we have to do is we have to balance those emotions. If we don’t do that, our emotions can lead us down a very dangerous path.”
– Dan Cuprill
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