It’s been a crazy few weeks, hasn’t it?
I’m writing to you today from my hastily set-up home office, while my two children tackle their school work on laptops from their bedrooms upstairs. It has been two weeks since my last face-to-face client meeting, and at least a week since life seemed anything close to normal.
For me, and for many of my clients with whom I have spoken, the hardest part of all that has happened has not been watching the market, or the fear of the virus itself. Rather it has been the feeling of loss of control. We all like to think that we are in control of our own lives, and realizing that there are things beyond our control can be difficult.
I was reminded recently of the Serenity Prayer written by the American theologian Reinhold Niebuhr, commonly quoted as “grant me the serenity to accept the things I cannot change, the courage to change the things I can, and the wisdom to know the difference.”
None of us can change the market. We must accept whatever it gives - or takes away. But here’s a list of six things that can improve our lives over which we can exert control, and make a positive change:
1)Maintain Your Health Routine.
In these stressful times it is easy to lose focus on the basics of good health. It is important to maintain good eating and exercise habits and to get enough sleep each night. Whatever news you are reading on your iPad late into the night will likely be hopelessly out of date by the time you wake up in the morning, so why not turn off the electronics and get a good night’s sleep?
2) Maintain Your Connections.
While we are doing our best to maintain social distancing, there is no reason that we have to be completely isolated from our friends and families. Technology solutions allow us an amazing ability to maintain connection during these trying times. FaceTime on Apple devices and WhatsApp on most platforms provide an easy way to maintain individual connections, while Zoom video conferencing offers free virtual meetings lasting up to 40 minutes for personal use for up to 100 participants.
3)Stick To Your Plan.
If you have worked with me for a while, you undoubtedly have some sort of a financial plan in place. Now is the time to review those plans, but it is not the time to change them. You should have ample assets in either cash or fixed income (bonds) to ride out this market downturn without selling stocks into a bear market. Times like these are why we place such importance on maintaining an emergency fund! Do not feel bad about dipping into that fund if necessary to get through the recent disruptions – this is why you have the emergency fund! However, if you feel you must do something…
4)Review Your Budget
While there are many aspects of your financial plan over which you have no control – such as how the market behaves – there are other parts over which you have complete control. One of these is your spending. Now is a great time to look over your budget and take control of your spending. Are you cash reserves lower than you had hoped? Perhaps re-allocating the cash you would have otherwise spent on eating out and commuting can help to rebuild that reserve.
5)Prepare For Things To Get Better.
The stock market has endured numerous bear markets over the last 200+ years, and they all had one thing in common: they came to an end. The market will recover eventually, and you want to be ready for it. Think about how this sharp downturn really made you feel. Are you ready to take on more risk in the hopes of capitalizing on the recovery? Or perhaps you have found the last few weeks to be much more difficult than you had expected, and would like to ensure that you never have to go through something like it again. Either answer is fine, and I can help you make those changes, but it is best if you don’t come to these answers during an emotional moment. The market is likely to be volatile for quite some time to come, and while buying in might be a good investment, don’t be surprised if there are big down days in our future as well.
6)Plan For The Worst.
One of the first questions I ask during an initial financial planning meeting is, “do you have a will?” While it may be distasteful to say it, now might be a good time to make sure that all of your affairs are in order in the event that you do get sick. The fatality rate from COVID-19 is thankfully small enough that the vast majority of people who get sick will make a full recovery. However, a sizable number of those people may need the services of a hospital to get better. Making sure that powers of attorney and healthcare proxies are up-to-date and readily available for all members of your family will make keeping affairs in order through a hospitalization much easier. Additionally, if you do not feel comfortable with your current life insurance program there are a number of carriers who offer accelerated underwriting programs that will allow me to place up to $1 million in life insurance in place in less than a week with no face-to-face exam, if you meet the guidelines. Please reach out to me if you need assistance with any of these items.
If you are anything like me, sitting around the house and thinking about everything that can go wrong in the world has been the hardest part of the last two weeks. The highlight of my days has been when I am talking to you, my clients and friends, and working to allay your fears and prepare you for whatever may come. Please feel free to reach out to me at any time. I am here to serve you, and hope that you and your families are staying healthy and busy in these strange times.
