Just think to yourself of all those great decisions you have made, when fear motivated you. I’m guessing the list is very short. However, fear is a part of life and can save us from getting into trouble. In the financial world, fear will only get you into trouble. In the 1980’s movie, Wall Street, the lead character (Gordon Gecko) was quoted as saying “Never get emotional about stock, it clouds your judgment.” I would like to take that a step further, and extend that warning to investing in general. People are creatures of emotion, and I see people get emotional over investing every day. This is not to say that you should turn a blind eye towards your financial affairs, or not care about them. Rather, this is a call to discipline.
The recent state of the economy and financial markets has tested the discipline of many investors. A lot of the investing public has been guided by fear. Those who had the discipline to remain calm, analyze what was going on, and either make strategic moves (guided by proper planning) or follow their game plan will come out on top. All I am advocating is to not be guided by fear. For some people, fear is a valid response to what is happening, especially when they are invested more aggressively than they should be, do not have the proper insurance coverage, or have lost their job. What is most beneficial in these situations, is to take a step back, try to calm down, and approach the situation from a position of mental strength. Do research on the problem if you don’t understand what is going on. Maybe losing your job can be the opening you needed to try something new, maybe even start a business. Perhaps what is most important is to speak with a professional. Now in this matter, of course I am biased, but good financial advisors are even more valuable when things are not all roses. Run your fears and concerns by us, that is why we are here. A good advisor can help educate you and take a look at your concerns from a different perspective. Helping to calm your fears and allowing you to make smart financial decisions is what keeps small problems from snowballing into major disasters.
Another great quote is, “There is nothing to fear, but fear itself.” In this market you can see it happening everyday. People get scared and sell something. Then, the next person sees that others are selling and the value of what they own is going down, so they decide to cut their losses and bail out. The entire situation snowballs. More and more people lose money, and no one wins. I don’t want you to fall in with that group of people. When you see things like this happening, go back to your calm, rational self and think the situation through. You will always be in a better position, and may even be able to make money. Again, here is a great place to call your advisor and ask what your options are and what you should do in this situation. I hope this will help you move forward no matter what the economy does. Remember, you don’t have to follow the crowd or be lead by FEAR.
