This crisis will pass, but so will the gift of it to waking-up to live the rest of your lives in gratitude and appreciation for each breath you take.
I have seen it all, or at least I thought I had. But this current financial/health outlier-black swan event is one in which no one can give early predictions as to the impact on our world or domestic economies, or the very survival of our healthcare system. Our family’s and our very own mortality are actually called into question. From nowhere we are now faced with unprecedented challenges. And in many cases overwhelming fear of the unknown.
First, on the financial side, if you are in the accumulation phase of your career, nothing has changed. Unless this is the end of our financial systems as we have always known them, and that is highly unlikely, the companies you have invested in and loved are now at fire-sale prices, provided you are going to hold them long-term. Just keep saving and investing as you have been.
Uncertainty is the last thing Wall Street wants to see. Uncertainty is the last thing any of us wants to see, especially when it comes to our health or financial security. We have, as a team at Grande Financial Services, witnessed more than three decades of ups and downs in the market, and just about every geo-political event imaginable.
This most recent downturn, as severe as it has been, is something that we have not seen before. It is disconcerting, to say the least, to watch your investment holdings lose up to 30% of their value in one week.
However, and yes there is a however, even though we have not seen exactly this particular rapid spiral into a bear market, and a possible recession, we know how it has turned out in the past, which has always been to come back and advance further. This should be no different as the banks are strong and the government is giving its full accommodation to both the virus and the financial markets.
I have witnessed firsthand over the years that fear is the most dangerous emotion when it comes to investing. The feeling of watching your portfolio grow each year is pleasant and rewarding, but does not match the intensity and pain of watching your investments lose value. Presuming that you had a good financial plan laid out, and your exposure to stocks was not more than the absolute minimum risk you had to assume to achieve your financial goals, just stay the course.
You must remember that your stock portfolio represents a long-term strategy, and that you are not to panic and sell out because of fear. Selling out after a large decline in the markets is turning a paper loss into a real loss.
John J., John S., and Traudy F. Grande, CFPs, are co-editors of the "Money Matters" column in Ophthalmology Times. They are owners and principals of Grande Financial Services Inc., Oakhurst, NJ (www.grandefs.com). The Grandes advise doctors across the country on a diverse range of investment and financial matters. Readers may submit their financial questions to them at [email protected] or call 800/722-1258.
The views depicted in this material are for information purposes only and should not be considered specific advice or recommendations for any individual. All investing involves risk, including the potential for loss. Past performance is not indicative of future results. No investment strategy can ensure a profit or protect against loss in a declining market.
John J. Grande, John S. Grande, and Traudy Grande are Registered Representatives offering securities through Cetera Advisor Networks LLC, Member FINRA/SIPC. Advisory services offered through Summit Financial Group, Inc., a registered investment adviser. Summit and Cetera are related and are under separate ownership from any other named entity. Registered Branch: 257 Monmouth Rd, Oakhurst, NJ 07755. Phone: 800/722-1258. Website: www.grandefs.com.