In these last few months, it seems like there hasn’t been a quiet day in markets. Every day seems to be chock-full of “breaking news.” Investors are drowning in headlines and looking in all directions for guidance on what to do.
The interesting thing is that sometimes headlines can cause more stress for investors than the actual results of their portfolio. I’ve had more than one client conversation recently where I was told, “I’m just too afraid to look at my account statements.” I was able to reassure these investors, as their results were much better than expected, but based on headlines, they were bracing for the worst.
As I often say, investing is hard, and it’s especially hard when markets are misbehaving. Today, I want to equip you with exactly what you need to not only survive these markets but to thrive in these markets. These built-to-thrive ingredients are as such: empathy, encouragement, and truth.
Permission to be Flustered (Empathy)
Yes, over time, markets rebound and markets recover. It is good to be reminded of this truth, but sometimes an “according to market history” response can discount the fact that, in this very moment, markets feel a bit unsettling. It’s ok to be a little flustered by all of this. That’s right, I’m granting you permission to be flustered.
In these times, you deserve empathy, and you need empathy.
We have a children’s book at home called “Grumpy Monkey.” A gorilla named Norman and all the other animals in the jungle are trying to convince Jim Panzee that there is no reason to be grumpy. Regardless of their reasons or efforts of persuasion, nothing is cheering up Jim Panzee. In the end, Norman ends up with some porcupine quills in his bottom and feels less than cheerful. This is when he realizes that it’s okay to be grumpy. Norman affirms Jim Panzee, and this empathy seems to be just what’s needed.
These are the moments you need to resource your advisor. You should feel free to vent, and feel free to share how all the happenings of the day are making you feel. Again, permission to be flustered, it’s normal and expected. Advisors are there to listen, affirm, and in the end, to help protect you from making ill-advised decisions in these trying times.
Empathy is a must.
You’re Doing Great! (Encouragement)
After you’ve been heard and provided some room to be grumpy, you also need to be encouraged. Allow me to start here: you’re doing great!
The idea of feeling all of these emotions and feeling flustered, but being advised to limit your actions in this moment, isn’t an easy task. We are wired to want to act on our fears and frustrations, even if the most appropriate marching orders are to sit on our hands. Just because it’s necessary doesn’t mean it’s easy.
So, again, you’re doing great! Keep your eyes on the prize, and don’t give up. You’ve made it this far, which means you are one day or one step closer to the end. Your self-control and endurance will be rewarded, I promise.
Keep it up 🙂
You CAN Handle the Truth (Truth)
Often, emotions can have a short lifespan. We can spike in anger or frustration, but eventually, cooler heads prevail. Empathy and encouragement are keys to helping you tame those emotions, but you’ll need truth to keep the hope and endurance alive.
We just can’t get this backwards. If we try to take a serving of truth before empathy and encouragement, it’ll often fall on deaf ears, come off as insensitive, and possibly have the opposite effect. So, don’t jumble the order, as the sequencing here is important. One hemisphere at a time – we settle the right brain, and then we address the left brain.
My colleague, Brian Szytel, posted this chart the other day, which I find to be quite a helpful truth:
What a powerful datapoint: 50% of the “best days” in the last 30 years came during a bear market, and missing 10 of those best days would’ve cut your return in half.
So, when markets are rattling your cage and you want to hit the eject button (go to cash), just remember how detrimental that move can be to your long-term results.
This is one of many little truth nuggets that are worth storing in your back pocket for times just like these.
Be Open
I want to wrap up our discussion today by encouraging you to be open to advice. Sometimes when we are feeling overwhelmed, especially when it comes to our finances, we can become shut off to advice. As I said above, I think your advisor owes it to you to be both empathetic and encouraging prior to sharing some of these important truths, but even with the appropriate dosage of empathy and encouragement, some of us can still be closed off to advice. Even when it’s the exact advice we need.
Feedback is the breakfast of champions, or as the proverb states, “Faithful are the wounds of a friend; profuse are the kisses of an enemy.”
A few Sundays ago, a friend of mine was preaching a sermon on encouragement, and he highlighted this particular interaction between Jeremiah and God. In the twelfth chapter of Jeremiah, the prophet finds himself venting and complaining to God regarding his current circumstances. The response in verse five is not one I was familiar with, and a response that I won’t easily forget:
“If you have raced with men on foot, and they have wearied you, how will you compete with horses?”
These are not easy words to digest in times of trial, but this is the truthful encouragement that is needed. Perhaps we built your financial plan during better economic times, and now things have turned turbulent, although the environment has changed, your financial aspirations have not. The job of the advisor is to counsel and guide you through thick and thin, through sleet and snow, so that you can achieve the financial goals you set forth for yourself and your family.
These markets are difficult, but they are not the most difficult. Don’t let these markets weary you, but rather strengthen you for the other challenges that lie ahead.
You were made to compete with horses, my friend.
