Scary market hugs
Markets are scary and everyone is panicking - your brain screams DO SOMETHING!
Financial resilience isn’t about making perfect predictions about what’s coming next, it’s about building a life that can adapt to whatever arrives. This works regardless of what’s happening with tariffs and markets. You’re building financial strength that serves you in any economic environment.
You don’t need a lecture about long term market returns, facts and figures. Give yourself a break, take a breath. It is normal to feel nervous, we are hardwired to run away from things that cause us uncertainty and danger.
At times like this, I try to avoid chasing predictions. Think in terms of a framework that can give us clarity. It’s exceptionally difficult to predict where the market will go. Focus on what you can control:
How can I make things simpler? Fewer accounts, fewer decisions. Consolidate accounts where you can so you can get a full view of your investment portfolio.
Avoid new commitments, delay major purchases. (i.e. new car, private school tuition, extravagant travel). This creates flexibility and margin for error in your cash flow.
Look for small savings opportunities. I’m not talking about your morning coffee. Look at the edges of your spending such as subscriptions, unnecessary shopping, food delivery.
If you feel the urge to sell off some of your investments - keep in mind: It takes the stock market four months to recover from a correction and closer to two years to recover from a bear market on average.
A ‘correction’ is defined as a 10-20% decline in the market.
A ‘bear market’ is defined as a decline of at least 20%.
Investments are for the long-term, if you sell off now, you risk missing out on the best days of the recovery.
Over the past twenty years, seven of the ten best days occurred within two weeks of the worst ten days. That’s a mouthful of statistics. Said different, the second worst day of 2020 was March 12, the second best day of 2020 was March 13.
If you have job stability and cash reserves, you will be able to sustain yourself through this decline with financial resilience. I believe in you and I’m sending you a hug!
