The election is complete. Remaining calm can help us psychologically as well as financially.
You may be feeling anxious and worried OR you may be elated and excited. Both feelings can be dangerous to your financial wellbeing if you react to them too strongly.
If you are worried and anxious, your instinct may be to sell your investments. This can be very costly financially. Over the last 50 years there have been numerous “crises” – oil embargo, high inflation, the tech bubble and 9/11. We also dealt with a real estate crash, global financial crisis, and a pandemic. Despite all the crises in the last 50 years, investors who remained calm and stay invested earned over 10% a year on average.
If you are excited or elated, you may suffer from overconfidence, taking on more risk than is necessary to reach your goals. This approach can be costly financially. As mentioned, there have been many crises over the last 50 years. What happens if you need money during a crisis? Don’t fall victim to Fear Of Missing Out (FOMO).
Focusing on your long-term financial plan and corresponding investments can help you remain calm. Remember, your financial plan and long-term investments take crises and market fluctuation into account so you can feel more confident that you can achieve your goals.
To remain calm focus on a few things. You can expect (but don’t predict) crises to happen – they are part of life. If you ignore the constant barrage of media tempting you to click and read online but that aren’t held to journalistic standards, you’ll be calmer and happier. Focus on your plan and the long-term. Most importantly, trust that your plan will work as designed.
Let us know if you’d like to talk more about this.
The election is complete. Remaining calm can help us psychologically as well as financially.
You may be feeling anxious and worried OR you may be elated and excited. Both feelings can be dangerous to your financial wellbeing if you react to them too strongly.
If you are worried and anxious, your instinct may be to sell your investments. This can be very costly financially. Over the last 50 years there have been numerous “crises” – oil embargo, high inflation, the tech bubble and 9/11. We also dealt with a real estate crash, global financial crisis, and a pandemic. Despite all the crises in the last 50 years, investors who remained calm and stay invested earned over 10% a year on average*.
If you are excited or elated, you may suffer from overconfidence, taking on more risk than is necessary to reach your goals. This approach can be costly financially. As mentioned, there have been many crises over the last 50 years. What happens if you need money during a crisis? Don’t fall victim to Fear Of Missing Out (FOMO).
Focusing on your long-term financial plan and corresponding investments can help you remain calm. Remember, your financial plan and long-term investments take crises and market fluctuation into account so you can feel more confident that you can achieve your goals.
To remain calm focus on a few things. You can expect (but don’t predict) crises to happen – they are part of life. If you ignore the constant barrage of media tempting you to click and read online but that aren’t held to journalistic standards, you’ll be calmer and happier. Focus on your plan and the long-term. Most importantly, trust that your plan will work as designed.
Let us know if you’d like to talk more about this.
*S&P 500 with dividends reinvested from January 1973 – October 2024. Calculated at https://dqydj.com/sp-500-return-calculator/. The Standard & Poor’s 500 Index is a capitalization weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. All indices are unmanaged and may not be invested into directly. Past performance is no guarantee of future results