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Don't Panic 2020

Dont Panic

Take a moment and think back on your life.  If you’re like me, and most people I know, you’ve had tremendous highs, gut wrenching lows, periods where nothing could go wrong, and periods where you just couldn’t catch a break, no matter how hard you tried.  Guess what.  Investing is no different.  After the 2008 financial crisis, the US Stock market, despite some minor interruptions has been pretty much straight up.  We’ve seen historically low volatility, and our statements, for the most part, kept going up and up.  

Then COVID-19 hit.

 

In the matter of just a few weeks, we saw all of the market gains of the last several years disappear into thin air.  What happened?  How could this happen?  Supposedly safe investments like short term bonds were even down in some cases.  One word…panic.

 

Think about your own reaction.  If you’re like a lot of people, especially those near to retirement or even already retired, you were glued to the television or the Internet news sites.  Doom, gloom, and despair.  But the most important question is this.  Did you panic and abandon ship at precisely the wrong time.

 

According to the March 31, 2020 Guide to the Markets produced by JP Morgan Asset Management, the S&P 500 has returned an annulized return of over 6% from 1999-2009.  Yet over the same period the average investor has made a measly 1.9% annualized.  Why is this?

 

I think there are two reasons.  Fear and Greed.  When everything is going well, investors get greedy, and take on more risk than they’re really comfortable with.  Then, when the bad time comes, fear takes over, panic ensues, and ABANDON SHIP!

 

To help you avoid this, we have two tools.  One, we’ll stress test your portfolio against a variety of stress tests, and show you how much risk is actually in your portfolio.  It may be a lot more than you think.  Two, we’ve written a white paper, simply called “Don’t Panic”.  You can download it for free here.

 

We hope that with these two tools at your disposal, when the bad times come and markets get rocky you’ll be able to step back, take a deep breath, and don’t panic.  And if you’d like to discuss your situation more in depth, please reach out to an advisor at Good Life Financial Advisors of NOVA for a no cost discussion about your situation.

<br /><br />Don't Panic Whitepaper



Don't Panic Whitepaper

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