“A global economic crisis is here and I’ve already lost a portion of my investment. Do I need to get out now?”
Senior international professionals have felt particular angst around the market’s performance in recent times.
You’re working abroad to ensure you can get and keep the life you want…
Only to see the store of value of your hard work fluctuate because of things outside your control.
I know you’re feeling anxious right now.
Possibly frustrated.I’d like to start off by saying, I understand.
All my own assets are invested and it’s hard to manage my emotions.
However, selling your investments and withdrawing from the market when things are volatile is the wrong thing to do.
As long as your portfolio follows some basic rules – you’ll have only experienced temporary discomfort.
There’s been no permanent damage or loss.
That would only happen if and when you sell!
It’s why I’ve often spoken about the many hats worn in my profession.
“Life planner” is one of them.
A life planner creates and documents a robust lifetime investment plan.
Only once you have this, can you get the faith, patience and discipline to keep you from blowing up that plan at some fleeting moment of market turmoil.
It’s safe to say it's tough trying to navigate rough seas.
Take 2020 as an example.
We hit record lows in March 2020.
The market then rebounded to make a great recovery and reach consecutive all-time highs.
However, a resurgence of COVID-19 cases in some countries…
Political and economic unrest in others…
Led to many investors anticipating the next market decline with bated breath.
The truth is, no-one knows if or when market drops might happen.
It could be tomorrow, next week, months from now or next year.
Understandably, this kind of uncertainty can lead to anxiety.
After all, you’re only human.
As they often do during periods of volatility, equity prices fluctuate.
See these periods for which they are – temporary.
What we’ve learned from years of investment management wisdom is that investing is a marathon, not a sprint.
Those who persevere and remain disciplined will reap the rewards they’ve set out for.
So when the market dips (which inevitably it will, we just don’t know when)...
Think about these two things.
First: does it seem probable to you that the largest, most seasoned, most well-financed and profitable companies in the world have permanently lost that percentage of their value as ongoing businesses?
Or does it seem more likely that the distressed prices of their stocks are the tail that is temporarily wagging the dog?
Second: the average post-WWII bear market carried the S&P500 Index down more than 30% from peak to trough.
So unless future volatility turns out to be much worse than this average, people who capitulate would sell much closer to the next bottom than the last peak.
One final thing before I end off…
2020 was an extraordinary year.
It made many people question why they don’t have an actual plan.
For without a plan, any investor is simply a speculator.
After all, human nature is always and everywhere a failed investor.
It’s never easy making big decisions alone – not even for you as a successful international executive or business owner who’s most likely a decision-maker in business and life.
You have a team behind you who helps inform your decisions.
You put your trust in others who have better knowledge on certain topics than you do.
This is where the inestimable value of a caring, intelligent and empathetic professional financial planner versus a product vendor resides.
Our team is on hand to step into that role for you.
And to help guide you towards the right decision for your ideal future.
For most of us, these needs are to fund the expenses associated with our desired lifestyle.
And, to the extent there is money left over at death, to provide family and friends with an inheritance and/or fund charities...
All while minimising taxes.
Whenever you’re ready to get started, let us know.
One of our experts would be more than happy to chat through your goals.
And see whether we can help make them happen.