Recently I was reminded to take my own advice.
It was not a fun day in the market and my first mistake was watching CNBC. I turned it on in the background and then totally got sucked in.
Every news person was reporting some stock was down or free falling. They kept using a Market sell-off graphic, which included ominous music that transitioned between each segment. Every time they came back from a commercial, they used a bear graphic to represent a bear market, that was red, snarling and I swear had red flames coming out of its eyes.
And I sent myself into a tailspin.
I was thinking about clients and their reactions to all this news and the market. I was putting myself in their shoes and thinking through who to call to first.
Luckily my wife called and gave me a verbal slap in the face to bring me back to reality: "Turn the TV off! Why are you watching that garbage?"
She was right. It was all fear mongering and sensationalism. They were not reporting information that could be used to make sensible decisions.
I tell clients all the time that, in my opinion, about 85–90% of the information presented by financial news outlets is not actionable. It is not information that people can use to make good money decisions and should be regarded as entertainment. We call it FEN—the Financial Entertainment Network.
However, I have been speaking with many clients over the last few months who are very concerned about what is going on in the stock market and the US economy. Many are worried about what this will do to their retirement savings and other assets.
When I think about my clients and bringing myself back to reality, I think about the image posted at the top of this blog post. It’s a drawing by Carl Richards, CFP® from his book The Behavior Gap.
Carl used to have a financial planning practice but has transitioned into coaching and mentoring financial planners. If you remember Venn diagrams from high school, the most important part is where the two circles intersect. We should focus on things that matter to us (family, kids, goals, dreams, and to some extent, money) and things we can control (our behavior, emotions, plans, and what we watch and listen to).
The goal of such a thought process is to keep our perspective in check.
Can we control the stock market—no. No one can. It can be manipulated to some extent but that is another blog post.
Does the negative performance of the stock market this year so far change what matters to you?
It shouldn’t.
It may make us re-evaluate goals and plans, but it should not change what is important to us.
My wife reminded me of this when I was in that recent tailspin. When I am emotional, I generally do not make wise decisions. I would venture to guess you can probably say that about yourself as well.
When emotions are running high and the market or economy is stealing your joy, please call me. If you are a current client, let’s talk about your concerns and come up with a plan.
If you don’t have a financial planner you can speak with, please contact our office. We’d be happy to chat and see how we might be able to help.
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