Crises in Context
One thing investors can count on is that they will hear numerous reports economic and market crises throughout their investment experience. Some of these will be actual crises; the majority will be nothing more than noise.
Crisis du Jour
The crisis du jour, as spewed by the financial media, pertains to predictions of an upcoming recession and bear market. Such news often results in investors becoming anxious, stressed, and itching to do something to protect their accounts. That is seldom a profitable move.
“Far more money has been lost by investors…trying to anticipate corrections, than has been lost in the corrections themselves.” – Peter Lynch
When faced with a crisis, or fears of an upcoming crisis, the best thing to do is take the long view and put the purported crisis in context.
For instance, when it comes to talk of recessions, we saw similar headlines as we see today in 2014, 2015 and 2016. Not only did recessions not materialize at those times, but the market is up significantly from those faux crises.
Put it in Context
For the next “crisis”, just remember to take a step back and put it in context. We have had many real and faux crises this century. And yet the economy adapted, and the market is significantly higher today.
We cannot predict nor control what the economy nor market will do. But we can ensure that our investment decisions are guided by our plan, and not the crisis of the day.
– Kaleb Paddock, CFP®
 Headline referenced include: ZeroHedge on Mar 16, 2014, Business Insider Oct 11, 2015, WSJ June 19, 2016.
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Kaleb can be reached at (720) 710-0939 or firstname.lastname@example.org.
Hi, I’m Kaleb. I’m the Founder of Ten Talents and I’m blessed to be regularly featured in CNBC, MONEY, and Business Insider personal finance articles. I’m a CERTIFIED FINANCIAL PLANNER™ (CFP®) Professional based in Parker, Colorado and I’m a fiduciary and fee-only advisor.
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