These are certainly days we will remember – for our generation, and generations to come. The COVID-19 pandemic has rocked our world…literally. We are being tested – our beliefs, our resolve, our plans. “Does it feel different this time?” Yes. It always does. But can we still be hopeful? We can. Here are some thoughts on how.
Remember Our Past
Black Monday: To say I remember the day October 19, 1987 would not be truthful. I was 7 years old. But I assure you early in my career this day was referenced many times. The Dow Jones Industrial Average lost over 22% value in just one day. This day is referred to as “Black Monday”. And what did most every investor fear? The next Great Depression. Did this occur? No.
Tech Bubble Burst: Now, I do remember where I was on September 11, 2001. I was a college student returning from my morning class. My friends were all gathered around the TV as the Twin Towers were on fire, soon to fall. This occurred right in the middle of the tech bubble bursting. How could we as a nation survive this? We did.
Great Recession: This time period from 2007 to 2009 was…let’s say it…unprecedented. Our country and world had never experienced anything like it. The stock market dropped approximately 57% from top to bottom (we are not there as of this writing). I vividly remember this time as an investor and financial advisor. To be honest fear did reign at times. Could we survive this? We did.
Remain in the Present
We are prone to become emotionally paralyzed in times as these. We digest news and information at a rate our minds and bodies just were not designed to do. How are we to respond? Well, we’d offer this: What can you control? Certainly not the stock or bond market. But how about these:
- Reduce the amount of news and information taken in each day. Start and/or end each day with silence and solitude. Relax. Meditate. “Be Still, and Know that I am God.” (Psalm 46:10)
- Revisit your overall financial plan. Are you still on track? If not, what adjustments can you make? Reduce withdrawals; eliminate certain expenses; and rebuild your emergency fund to name a few.
- Remember what you are invested in – stocks and bonds of companies. Although it can feel like your monthly or quarterly statements are just paper, they actually represent the ownership you have in companies or debt and interest owed to you (bonds). Question: Do you believe that the overall values of these assets will be higher in 1-5 years? If so, then remaining invested with goals in mind is prudent.
Reassure Your Future
“Cash is king,” my old boss Dave Ramsey still says. No doubt – in this economy, cash is king, whether as an emergency fund or an investment opportunity. Maintaining a healthy cash position is critical to weather these storms.
But here is the sobering reality: We all know our time on earth is limited. “Death and taxes”, right? They’re unavoidable. But what is your ultimate treasure? Hopefully, it’s not cash in the bank, under the mattress or buried in the ground. That paper is only as valuable as the country backing it.
Now do we believe that our USA currency is heading that direction? No. But is this a “gut check” time on what we ultimately value? Yes.
Is your future secure? Ponder this as we weather this storm.
As a Christian, it’s a great time to meditate on the truths of Scripture.
Psalm 78 says, “Give ear, O my people, to my teaching; incline your ears to the words of my mouth! I will open my mouth in a parable; I will utter dark sayings from of old, things that we have heard and know, that our fathers have told us. We will not hide them from their children, but tell to the coming generation the glorious deeds of the Lord, and his might, and the wonders that he has done.” (v. 1-4)
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*For financial planning clients of Rivertree Financial Planning: Please contact us as soon as possible if you have had any changes in circumstances, objectives, goals or risk tolerance.