Mind Games: Shock, Awe, & Perspective
When we encounter significant, unforeseen events in our lives, such as the emergence of the Coronavirus, it often leads to heightened levels of uncertainty and anxiety. As investors, we find ourselves at a crossroads, questioning whether to seek refuge in safety or adhere to our established financial strategies.
During moments of unease, anxiety, and trepidation, it’s advantageous to take a step back and contextualize our circumstances correctly. By placing our present situation into perspective, we can make more informed decisions for the future.
The financial crisis of 2008/2009 bears resemblances to the challenges we face now. Economic hardships, accompanied by government interventions and market volatility, stirred restlessness among investors. Many stayed awake fretting over market fluctuations and some were inclined to sell their investments.
However, those with a long-term investment perspective who remained steadfast and disciplined ultimately reaped substantial rewards. Reflecting upon the past 12 years, the great financial crisis of 2008/2009 appears as a minor blip preceding an extended bull market.
To alleviate the anxiety and fear that often engulfs us, it is vital to minimize exposure to sources of stress. Just as we might choose to unfollow individuals on social media who cause us distress, we can likewise distance ourselves from news and information that might trigger impulsive and costly investment choices.
While we cannot control the news or global events, we do have the power to regulate our focus. What we pay attention to significantly shapes the decisions we make. Let’s take control of the information we consume, enabling us to achieve the best long-term outcomes.
By Marcus E. Ortega, ChFC, RFC | Investment Advisor Representative | CEO of Mosaic Financial Associates & Orthopaedist Advisory Group | Securities and advisory services offered through Cetera Advisors LLC, Member FINRA/SIPC, a broker/dealer and a Registered Investment Advisor. Cetera is under separate ownership from any other named entity.
©The Behavioral Finance Network. Used with permission.