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Are you consumed with worrying about the national debt and potential collapse of the U.S. dollar? If so, you’re not alone. The ever constant worries about a wide range of troubling financial scenarios dominate the imaginations of many investors today.
In truth, “Armageddon scenarios” have always been around. It’s a constant within the financial markets. While it’s okay to be fearful at times, you can’t let this emotion overwhelm your long-term financial plan. As author Nick Murray says, “optimism is the only realism.”
How To Stay Sane in the Mayhem
How will some improbable financial catastrophic occurrence impact your particular situation? That’s the real question. Assuming that you’re a long-term investor focused on specific life goals, you’re way ahead. The consensus apocalypse has always been part of the investing landscape. Stay focused on what’s most likely to happen, not storylines that are very unlikely to occur.
A large part of successful investing is understanding what you can control and what you can’t. You can control how well you diversify, investment costs, and overall strategy. You can’t control external events.
Investing is akin to looking at a rose bush; it’s beautiful, but this beauty comes complete with thorns. The thorns are part of nature, but they don’t detract from the beauty.
Reasons for Optimism
From a practical perspective, if you look at the history of the market and unforeseen events, you should come away with confidence. September 11, multiple wars, hurricanes, and COVID-19 all occurred over the past 20 years, yet the market has moved higher. Innovative companies work around the difficulties and that’s precisely why you invest in them.
Transient worries about ‘what if’s’ have always been part of the investing equation. The antidote to these worries is to focus on your investing lifetime and avoid the distractions of the present. This allows the power of compounding to work in your favor and puts you in a position to capture the long-term returns of the market.
Of course, the rapidly increasing national debt level is reality, but many media headlines each day are fantasy. If you react to these made up narratives, you’ll probably make poor investing decisions or elect to stay out of the market entirely. The wisdom of the late Charlie Munger is worth remembering: “The big money is not in the buying or selling, but in the waiting.”
Daily stock market prices reflect uncertainty. Overall, prices have to be set at a level where investors want to invest. It’s good to remember that when you sell a stock or a fund because you are worried that the price will go down, someone else is buying because they think the price will rise.
Invest Confidently
Give yourself permission to feel the fear and experience the anxiety, but rely on a financial planner to help you keep these emotions apart from your investing decisions.
Begin to think about the always present external worries as part of the necessary formula for long-term above inflation investment returns. If you can take that big step, you’ll be on the path toward accomplishing your particular financial goals, the things most important to you. Start there. Ready for a real conversation?
Related: The Remedy to Your Investing Stress