Turbulent Times

In life we all experience times of trouble or difficulty.  In fact, life tends to cycle from good times to bad and back again.  But when rough times come, seldom is it a good thing to panic… to react by making decisions out of fear or emotion, or even worse, to run from the trouble at hand.  One thing I’ve learned recently is when life has it’s difficult times, we are wise to lean into those troubles and work through them.  And we aren’t successful in this by doing it alone… friends help, mentors, family and even God is there with us in the midst of our troubles.

Financially speaking, we must realize that our investments will also face turbulent times.  Just as in life, markets cycle and various investments go in and out of season.  The real question is when the volatile times come, how do we handle them?  A little encouragement is to avoid two common mistakes: don’t react on emotion, and don’t try to face these times alone.  When working with a financial advisor you aren’t alone.  They can provide objectivity on your portfolio and help you through choppy markets.

The other lesson learned is that we do eventually get through the rough waters (at some point). Of course, stock markets don’t recover overnight.  On average one 20% correction occurs every five years, but their recovery times vary.  According to Bloomberg, in 1974 the market suffered a -37% loss and took over five years to recover… but from 1981-1982 the market suffered a -25% correction and only took 83 days to recover.  And of course we are recently familiar with the corrections from 2000-2002 and also in 2008.

So what do we take away from this?  In the tough times don’t panic and avoid making quick, emotional decisions.  Remember the proverb that states, “The plan of the diligent lead to profit as surely as haste leads to poverty.”

Getting Back on Course

On a camping trip with the kids this past weekend, my daughter stayed in the woods to cut down a tree branch… my friend and his kids continued hiking back to our campsite.  When she had finished, we picked up our gear and began our trek to catch up with everyone else.  But unaware, I took a wrong turn and led us deeper into the woods.  After about ten minutes of hiking, it was apparent to her that we were lost.  A few minutes later she started to tear up and become afraid.

Having hunted in these same woods over fifteen years I knew we were safe.  My frustration was that I had led us in the wrong direction… and I knew it would take much longer now to get back to camp.  Her shoes were wet, her spirit beginning to break, and all she wanted was to be back with her friends (and to eat lunch).  Can’t say I blame her… as an eight year old (like her) I remember getting lost in my Mamaw’s neighborhood one time.  The word “fun” has never been used to describe that experience. 

Now, in the woods with my daughter, I began to experience a different fear… “what if” my six year old son had turned back for us and not continued on with my friend and his kids?  JB could easily assume that my son had stayed with me and would likewise be unaware anything was amiss.  That meant my son could be lost in the woods by himself… perhaps even feeling like I did as a lost child?  And to make matters worse, I left my cell phone in the tent, so there was not any quick phone call back to make sure all was okay (or to get a simple four-wheeler ride back to camp).

The mind began to run… and in a short while I was starting to feel a little panic like my daughter.  I had no control over my son’s situation and that is difficult for a parent.  But that’s when a simple thought landed.  I had a choice… to feed my daughter’s fear, or to turn our current situation into a learning experience.  We stopped, I said a quick prayer for my boy (and for us) and then began to point out signs to her.  Observing what was around us, we rather quickly found our way out of the woods and onto a familiar trail.  Then I let her take over and she eventually led us out to the road.  From there, we were back at camp within a few more minutes only to find her brother roasting s’mores over the campfire.

Thinking back on this experience I am reminded how easy it is to get caught up in hype, fear, or chasing trends with our investments that the “noise” around us soon causes us to lose focus.  We become distracted, and before long realize we aren’t following our plan.  We have taken a wrong turn and are no longer on course… or we simply become afraid, which can lead to emotional decisions that aren’t good for us.  There is much value in learning to stop and observe before we take action.  Through this practice we can make better decisions to get us back on track, and it’s how my daughter learned to get out of the woods!

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