Well, it’s another crazy day in the markets, so I wanted to share a few thoughts. The price of oil has plunged, the yield on the 10-year treasury bond has hit an all-time low, and all the major US stock indices are declining dramatically. Trading was even halted this morning to give investors a moment to breath and digest information. So, what does all this mean, and what should you do?
The big question is whether or not the recent events will push the US economy into a recession. And here’s the answer – no one knows at this point. It really depends on how the consumer hangs in there, and right now, consumers are cancelling their trips, and wiping out grocery stores of toilet paper and hand sanitizer. I’m sorry I can’t answer that question for you, but that would require a crystal ball, and I don’t have one of those. Neither I nor anyone else can predict how this will all shake out , but here’s what I can do:
- I can tell you that based on historical facts, this too shall pass.
- I can remind you that if you are a Client of ours with a financial plan, our plans account for periodic drops in your portfolio, so this doesn’t surprise us or take us off guard. Events like these are what we plan for
- I can tell you that I understand your fear, but having fear which is a natural human emotion and acting out your fear are two very different things
The fear of loss is great and can lead to bad decisions. The fear of future regret is something that is harder for us to master. But today, before you make any large investment decisions, take a moment to consider what you may regret in the future. What I have experienced over the long-term is that investors regret not buying great assets during times of crisis and panic. And they absolutely regret selling out of their diversified portfolios when the markets are down.
If you have any questions or would like to talk about your specific situation, please reach out.