Game Plan for a Panic

“Everybody has a plan until they get punched in the mouth.” – Mike Tyson

In market terms, we’ve taken quite a punch and are currently in the throes of a violent market sell off. During these times, as your advisor, we’re front and center helping you deal with market... and your emotions.

We're your calm and collected voice of reason in a storm of chaos and fear.

Helping you tune out the noise, focus on what matters and avoid “the big mistake."

Right now it’s more important than ever to stay calm and maintain composure and a sense of historical perspective. If you’re concerned, we urge you to please reach out anytime (email, office or cell).

We’ll get through this difficult time just like we’ve done every time before.

In the meantime, here’s some classic guidance and perspective to help you get through this one, which like all the others, will prove in time to be completely temporary.‍

Our Plan for a Panic

‍We start with some general guidelines (and a few facts) to keep handy for any market correction, bear market, flash crash, or panic:

• Markets average a 15% decline intra-year... every year
• Daily dips of 2% or more occur about 5 times a year
• Every 5 years or so, markets temporarily decline 30%+
• Markets rise on average 3 out of every 4 years
• Over long periods, stocks significantly beat inflation
• Selling low and buying high NEVER works
• Turn off the TV… and don’t check your accounts
• NEVER make important decisions based on emotion
• These declines are ALWAYS temporary

There are essentially three options on how to react to a market panic: Put excess cash to work; freak out and sell, or simply do nothing.

While many become emotional about investing, you don’t have to be.

Having a solid financial plan and reviewing it annually substantially reduces anxiety during these volatile times. These drops are scary, but you have a choice as to how terrible you make it on yourself. It feels substantially longer when you watch the markets nonstop, read every article and check your balances incessantly.

Abby Joseph Cohen of Goldman Sachs famously said,

‍“If you want to take the volatility out of your portfolio… don’t look at it as much.”

Our advice is to make a note of today’s time and current market level. Then, jot down what you’re feeling at this moment and file it away. Check back in six months and compare it to how you feel then. Keep it for next time you feel this way.

We can revisit your portfolio and life goals to give you the confidence and conviction to ride this out and focus on your life, not the market. We encourage you to read our latest blog Living By Design to understand just how important meeting with us actually is during times like these.

You’ll be amazed.

Hang in there. This too, (like all others before it) shall pass.