Am I OK?
One thing that we have learned from this market is that we all want certainty. We want answers. But we live in a world that is, at times, too complex to be predictable. The one certainty is that there will be uncertainty, and we have to prepare carefully and thoughtfully.
So that is a big part of my job: to be strong and steady, thoughtful and rational. I feel a deep obligation to you and am working hard to deserve your respect and trust.
You are most certainly asking: “Am I OK?” Is there anything we should do now? Should we have done something different? Here are my thoughts:
“Am I OK”?
In the big picture of things: you are all going to be OK. We live in the wealthiest society in the history of the world and in times like this I try to remind myself to be grateful for what I do have rather than focusing on what I may have lost.
I think most of you are going to better off than what it may feel like right now. There should be no need to sell any of the investments that have the largest losses any time soon (unless we can utilize those losses for future tax advantage), so what matters is not what happened this month or this year, but what happens over many years.
And I will be here to help.
Is there anything we should do now?
The prevailing emotion is fear of losing more money. This is not a time to make decisions based on emotion.
The rational side of my brain says that we are nearer to the bottom than to the top. Everything that I have ever read says these are the times to be investing: at the time when everyone else is selling, when emotions are running high, “when blood is running in the streets”. It is kind of bloody out there. Even though nobody knows what will happen next, especially in the short term, my recommendation is to stick with your existing strategy.
Should we have done something different?
Here are some of the things that I feel we did right:
In the past year or two, I have moved almost all of my clients into some more conservative investment portfolios positions than what we had prior. While they are down in value, I feel very good that these investments have held up better than the stock market averages.
We have income reserves of more safe, secure funds set aside for clients who are taking money out of their investments, and moved more funds to conservative positions for clients who are nearing retirement.
Here are some of things that we can improve on:
Determining how much risk to assume for each individual client involves hypothetical situations and is an art rather than a science. We can use this current experience to better determine a balance between your need for investment growth and your tolerance for volatility.
We can have a greater respect for the severity of uncertain events, rather than just the likelihood. Even if something is very unlikely to occur, if the impact is large, we will try to be better prepared.
As always, please give me a call toll-free at 1-866-786-2521 if you have any questions or simply want to talk about your investments.