Do words like “PLUNGES” or “PLUMMETS” (preceded by “the stock market”) make you a tad nauseous? They’re supposed to—along with feelings of fear, panic and dread. The media thrives on stirring emotion. And when it comes to our money, we tend to think of our investment balances at their highest point, which becomes our bell weather of success or failure.
I’m here to tell you that it’s ok to feel the way you do, but it’s NOT ok to act out of emotion over the headlines and stories written to create the very reaction you’re experiencing. It’s like craving a Twinkie. You know the yearning will pass, but that if you give into it, regret will surely follow.
When the headlines are screaming at you, it’s important to remember some foundational ideas:
- Market volatility is normal. It is the constant pricing and re-pricing of securities based on known information or speculation of the future.
- Your future success is not dependent on where the Dow Jones Industrial Average is right now.
- Ignore the big picture at your peril.
- Focus on what you can control (and not on what you can’t).
- Creating and maintaining a rational, well-conceived financial plan that considers all market conditions is a good place to find comfort.
- Regret is a sour feast. Hold your values close, especially when all the news seems to be filled with nothing but rotten stories.
Your ability to frame or reframe your thinking is connected to your willingness to break free of the cycle of news stories, speculation and unabashed sophistry of those trying to remain relevant. Ask yourself: who benefits from roiling markets?
Your behaviors stem from your beliefs and your money mindset. If you believe the headlines and stories, you are more likely to act irrationally and do harm to your future success. If you are able to put the drama aside as yet another round of normal market re-pricing, then you are more likely to follow a rational plan and get yourself through the turbulence.
Unless you are a committed contrarian, you might view these times as dark. The contrarian sees nothing but opportunity in lower prices and is an avid buyer. A glitch can occur when you start to believe that you can time the market and wait to buy when the market hits bottom. Of course, we all know intellectually that this is impossible as a strategy. If you are the person who bought at the very bottom, chances are very good that it was nothing more than dumb luck. It’s like the guy who won the lottery saying he KNEW what numbers were going to come up.
The battle of the brain and emotions continues every day. We experience doubt and fear. We believe we “should” be able to make the right moves to ensure that we never see a down cycle (we can’t). We “should” be intelligent enough to know when to buy and when to get the heck out of Dodge (we aren’t). We can’t and we aren’t—and trying to either is like counting sand at the beach.
Instead, stay focused on the big issues—like your values, health, family—and on what you can control. And for goodness sake stop reading, listening and opining over the media’s second-by-second account of this latest iteration of markets gyrating up and down. Unless you really enjoy that nauseous roller coaster ride…