It’s a scary time for the economy right now. Fear is causing panic, which means the stock market has been about as reliable as Social Security benefits. Everyone is worried about their retirement portfolio, as they’ve seen those double-digit percentage drops.
We’ve had some record-setting days, for the worse, but also for the better.
If there’s one thing the stock market is telling us right now, it’s that people are being fearful. Warren Buffett would tell us this is the time to be greedy.
“Be fearful when others are greedy and greedy when other are fearful.”Warren Buffett
But regardless, you’re likely more concerned with holding onto your money than you are with taking advantage of all the financial panic.
I know many people who just started investing over the last few years, since the stock market has been doing historically well. Plenty of those people have been happy with their investment performance.
They think they’ve got it down. They don’t have it down.
They just started investing during a time when the stock market was skyrocketing, and there’s a good chance most of those people haven’t beat the actual market returns, because they’ve been astronomically high for a few years now.
So what should you do right now? Find the investing opportunities? Pull all your money out and hide it in the basement next to the mountain of toilet paper?
We, as Christians and rational people, can respond… rationally.
Stop Looking at Your Investments
If the market is stressing you out, stop looking at it.
Investing is like a rollercoaster — it’s only dangerous if you jump off while the ride is still moving.
When the market tanks, you don’t own any less shares of the stocks and funds you’re in, they’re just worth less per share. It’s a waiting game, and if you wait it out, it’s going to bounce back. That is, if history tells us anything.
The good news is, if the market completely tanks, it would likely have a similar effect on the global economy, and there’s nowhere your money would be safe. Wait, that’s not good news… but it’s also not going to happen. And yes, gold investors, you would still be safe to go snuggle with your gold in your prepper shelter.
Why are you stressing yourself out by watching the market like a hawk? The market is a tornado right now, and I’m pretty sure hawks stay away from tornados.
It’s going to be ok. I promise.
If you’re close to retirement, you shouldn’t have the majority of your investments in stocks anyways, but if you do, you may just have to wait a little longer to start pulling out your income.
If you’re completely stressed, let’s break that stress down…
What’s the Worst that Could Happen?
I know, famous last words.
“Hold my beer and watch this. What’s the worst that could happen?”
That’s not how I’m using this phrase. I mean it literally. To combat worry, start by asking yourself what the worst possible outcome could be… and accept that.
If you accept the worst, reality won’t be as worrisome.
It’s highly unlikely that the stock market is going to completely collapse, and all of your retirement savings wiped out.
But what if it does (worst-case scenario)? You’ll be fine. First, it will likely grow your faith in God. We grow the most during the worst times. But remember, this is the worst possible case. It’s probably not going to happen.
“I’ve had a lot of worries in my life, most of which never happened.”Mark Twain
Read your Bible. Talk to God. Calm down.
Staying the Course
In my recent article on the Coronavirus Economy, I gave you six things to remember, and this was during the start of all this pandemic stuff.
Those six things are worth restating:
- Don’t start buying stocks if you know nothing about stocks
- You never know how high or low a stock will go, and it can always go to $0
- Focus on what you can control: consistent & diverse investing
- Chasing returns is a losing strategy; stay the long-term course
- Always buy stocks based on the company, not the stock price
- Don’t forget your long-term plan due to short-term news
If you’re using a dollar-cost averaging method, you’ll be investing the same amount each month, at the same time each month. That means you’ll be buying more stocks and funds right now in your automatic retirement contributions, because the share prices are all down.
When the market comes back, you’ll have quite a bit to show for it.
This is the worst time to make changes to your retirement contributions, because it could be the best time to keep buying at such low prices, which will be the thing that helps your retirement portfolio recover and excel.
Never move your investments out of fear.
The best thing to do with your investments, when you’re fearful, is nothing.
However, sure, there are some opportunities to buy right now, but if you’re worried about your retirement, and you’re stressed out, just stay the course.
Keep investing how you’re investing. This will be over soon enough.
Finding Opportunity in Chaos
I have a fund set aside with what I call “play money.”
When I find opportunities in the stock market, I have money in a brokerage account ready to buy. I have this account for a few reasons, but its mostly to continue learning about the market, and occasionally to buy stocks in companies I want to be part of.
I’m not trying to time the market. I rarely sell any stocks.
Right now, airline and cruise stocks are on sale. They’re on clearance.
But remember point #1 and #2 above. Don’t buy stocks if you don’t know anything about stocks. You never know how high or low a stock will go, and yes, it can always go to $0.
Don’t invest in what you don’t understand. Honestly, nobody really understands stocks. Mutual fund managers can’t consistently pick winning stocks that beat the market. That’s why I always suggest investing in passive index funds.
But if you have the money, you can play. And that’s exactly what it is: playing. It’s a game, and one thing that’s for sure is the fearful will always lose.
So let’s all calm down, get some play money, and have some fun.
Everything is Going to Be Ok
You may be reading all of this with sweat dripping down your face, and ulcers forming.
If your only concern right now is your investments, and how poorly they’re performing, don’t worry about all of this “play money” talk. Focus on staying the course.
The stock market works in cycles, and it will cycle back.
Plenty of people will tell you otherwise. You’ll see articles about how “this is it.” This is the time the stock market won’t recover. And you can find those same articles written about the 2008-2009 financial crisis, Y2K, and if you go back to the journalists in 1987, you’ll see the same thing.
Stop letting the news dictate how you feel, and don’t let it dictate how you invest.
It may be best to stop watching the news all together.
Take a deep breath and open your Bible.
There are plenty of verses to help you combat worry:
“Do not be anxious about anything, but in everything by prayer and supplication with thanksgiving let your requests be made known to God.”Philippians 4:6
“For the Spirit God gave us does not make us timid, but gives us power, love and self-discipline.”2 Timothy 1:7
“So do not fear, for I am with you;Isaiah 41:10
do not be dismayed, for I am your God;
I will strengthen you and help you;
I will uphold you with my righteous right hand.”
“Have I not commanded you? Be strong and courageous. Do not be afraid; do not be discouraged, for the Lord your God will be with you wherever you go.”Joshua 1:9
Therefore I tell you, do not worry about your life, what you will eat or drink; or about your body, what you will wear. Is not life more than food, and the body more than clothes? Look at the birds of the air; they do not sow or reap or store away in barns, and yet your heavenly Father feeds them. Are you not much more valuable than they? Can any one of you by worrying add a single hour to your life?Matthew 6:25-27
When anxiety was great within me,Psalm 94:19
your consolation brought me joy.
Make the Most of This Time
Take advantage of this time, if you’re quarantined and stuck at home.
Here are 40 ways to make the most of time at home.
I’ve been able to finish manuscripts for two books, write plenty of articles, and read five books. I’ve also been thankful for the vast amount of time to play games and watch movies with my family.
My kids don’t understand that the economy is on edge right now. They don’t understand the full extent of how a virus affects families all over the world. They just know we get to spend more time together.
Look to the children to respond with a warm heart.
You can come out of this a better person. We all can.
Further Book Reading
- How to Stop Worrying and Start Living by Dale Carnegie (This is the best book ever written on handling worry and stress)
- When Should Your Kid Have Their Own Phone? A Real Conversation
- Don’t Just Teach Your Kids to Set Goals, Teach Them to Do This
- 10 Practical Steps to Start Practical Minimalism
- Stop Saying Adoption is Expensive
- Budgeting for Kids: How to Teach Budgeting From Age 3 to 18
- How to Save Money on EVERYTHING for Your Family: The Complete Guide