Here are a few points that will help alter your lens and retain a perceptive, yet calm mindset.
A generation of investors are experiencing their first genuine financial crisis.
No amount of rational thinking can ease the pain of the first time you watch a chunk of your life savings evaporate within a few weeks.
Many of you know that the current market is experiencing heavy peaks and falls at this point in time. Yet, it is important to have a calm perspective on how to deal with the crisis, mentally and emotionally.
Don’t Let Emotions Win Over Reason
“The only two days that really matter in investing are the day you buy and the day you sell. All the ups and downs in between are simply noise. If you can learn to ignore the noise and stick with your investment plan, you’ll do just fine.”
– Mel Lindauer, co-author of “The Bogleheads’ Guide to Investing”
Brian Preston, host of the YouTube channel and podcast “The Money Guy Show”…
“Creating wealth is simple — buy the market while you are young, and let compounding growth do its magic. However, wealth creation is not easy. You have to fight all of your human instincts and build a worldview that is separate from the herd. That is hard the first time you experience irrational behavior and whipsaw markets.”
Limit What You See on the News & Social Media
Watching extreme volatility on a daily basis will give you anxiety and sleepless nights. A calmer approach with long-term perspective will take you further. Please don’t get angry or beat yourself up with ‘would have, should have’ —all investments have risk.
You can reach a point where staying up-to-date on the latest news is more harm than good. News about school closings or advice from health officials is good, actionable information. News about market drops or volatility can be valuable information, but not necessarily actionable – Separate the actionable from the un-actionable.
Much of the news about the market and coronavirus is great for staying informed and up-to-date, but may not be great for your mental state and financial well-being.
Limit the number of notifications and subscriptions you sign-up to. There’s no value in getting market updates on a daily basis if your goal is to invest for the very long-term. History shows that the market will have good days and it will also have bad days… and even terrible days. There’s no benefit in putting yourself on high alert with every move.
Remember… This Isn’t Our First Rodeo
To help putting things into perspective, imagine what older generations felt during World War II.
In the end, there are two outcomes: you will get through this, or everything falls apart. If we get through this, you have a pretty good chance of seeing things go back to normal, even if it’s a new version of normal.
Despite past events shown throughout history, see the positive and have faith in the human race.
People have shown the proven ability to adapt, invent, transform and make the world a better place in desperate times… and that, in the end, is what fuels a strong economy world-wide.