We all feel caught off guard. The financial professional, the Do-It-Yourself investor, and the 401(k) participant three years from retiring. You might feel like only a few weeks ago you “coulda, woulda, shoulda” done something different with your investments. There is never enough safety when fear takes hold. If we had 10% in stocks a month ago, we wish it had been 5%, or none at all. Go easy on yourself. Even if you were caught off guard, this is your chance to emerge from the current financial crisis with No Regrets.
Facing a financial crisis
It is not a mistake to miss the top of the stock market, but it can be catastrophic to make money decisions based on fear and emotion when the market drops. We know this firsthand because we continue to witness the fallout from the Great Financial Crisis that began over a decade ago. We meet people with cash who missed years of recovery and financial security because of fear. We see people who own expensive, confusing products that were bought in 2009 because they wanted safety at any cost. These decisions probably felt so right at the time. Moving to cash or buying “safe” products is doing something instead of nothing. Except that some actions can cost you a secure financial future. Let’s learn from these lessons and do the things that will build financial strength for you and your family.
To adopt a No Regrets mindset, first, give yourself a pass for not being able to predict the future two months ago. You aren’t clairvoyant and neither is anyone else. Second, resist the urge to make dramatic changes to your investments based on emotion. Now, imagine your ideal self on the other side of this financial crisis: Confident, Informed, Cool. How do you get there from here? Simplify.
Simplifying your investments
Simplify your statements. Most investors have too many investments in too many accounts at too many institutions. It is impossible to monitor, manage or even understand. Consolidate where you can, clean up those tiny mutual funds and stock holdings, and make sure each investment serves a purpose in your plan.
Simplify your sources. There was too much information and not enough knowledge before COVID-19, but now it is just overwhelming. If you do research on your own, make sure it is diversified and not all from one perspective. If you work with a certified financial advisor, keeping you informed is where he or she truly earns their value. Lean on your professional team to cut through the noise and offer their perspective, not just a company line.
Simplify your stresses. All the things you read about are not a risk to you. Remember, if you are a diversified investor, you are not the market. You have investments that move in different directions, at different times, for different reasons. In order to remain cool, spend time understanding what could really impact you, then work with your advisor to manage that unique risk. Then…go about your life. We are learning that risk can emerge when we least expect it. But through it all, we can still be fine. Our plan can still be intact, even if the stock market is scary.
On the far side of this virus scare, there is a better version of your financial self, waiting. You can be the one who has committed to simplifying the complexities of money, controlled what can be controlled, and prepared for the future with clear eyes. The opportunity to become that person has not passed, in fact, it is right now. It all starts with not giving in to fear at moments like this.
No Regrets. Your goal in navigating the crisis of the moment should be to make the kinds of decisions your future self would be proud of when it comes to managing your money. Taking steps to simplify your financial life will help you to make those choices with clarity and confidence. Let us know how we can help support each of these steps. We wish you health and peace in these turbulent times.
Morton Brown Family Wealth LLC is a registered investment adviser. This information is not provided as legal or tax advice but for information purposes only. Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk and therefore can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Morton Brown Family Wealth (“Morton Brown”), or any non-investment related content, made reference to directly or indirectly in this newsletter will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this newsletter serves as the receipt of, or as a substitute for, personalized investment advice from Morton Brown. Please remember to contact Morton Brown, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing, evaluating, or revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. Morton Brown shall continue to rely on the accuracy of the information that you have provided. Morton Brown is neither a law firm, nor a certified public accounting firm, and no portion of the content should be construed as legal or accounting advice. A copy of Morton Brown’s current written disclosure Brochure discussing our advisory services and fees continues to remain available on our disclosures webpage. Please Note: Please advise us if you have not been receiving account statements (at least quarterly) from the account custodian.