2020 Elections, The Stock Market, & Your Retirement Savings: Shining A Light on What Scares Us Most
Unless you have sequestered yourself from all forms of media, it has been hard to escape the rampant hyperbole surrounding the 2020 Presidential Election. Crazy to think we are still over a year away from it! If you are like many other investors you might be wondering how all of this uncertainty and, at times, chaos will affect you and your retirement savings.
First off, know that the anxiety or trepidation you might be feeling is absolutely normal. Unfortunately today, in the world we live in, it is virtually impossible to stay current on the days’ news without subjecting yourself to massive amounts of sensationalism, opinions over facts, and all too often fearmongering. It takes a very unique person to be able to digest this kind of content and remain unaffected or stoic in their beliefs.
But I digress, the purpose of this piece is not to expose the flaws of the modern-day media machine but to rather prepare – or better yet – inoculate you, our Blooom client (or prospective) client from the inevitable media circus that is gearing up for what will likely be the single most-watched Presidential election in our Nation’s history.
Your Retirement Savings are Important
There are 4 little words that have often been the un-doing for countless well-minded investors: This. Time. Is. Different.
Allow me to explain how this can wreak havoc on your retirement savings. Most people know that the right thing to do is to focus on the long term when it comes to your retirement savings. Heck, you might not need to touch this money for 10, 20 or maybe even 40 years, right? And when the markets appear to be relatively calm it is easy to have this long term perspective. The problem surfaces when markets drop and the media fear-mongering starts to pick up steam. It is precisely in these times when many of those well intentioned “long term” investors start to utter those 4 dangerous words: “This time is different.”
What they really mean by saying or feeling that is: “I know that historically speaking the right thing to do has been to maintain a long term focus knowing that every single dip in the stock market has been followed by a recovery and still to this day we continue to make new, all-time highs in the market. But….THIS TIME IS DIFFERENT.”
“We have never had a President like this.”
“We have never had this much trade dispute with China.”
“We have never had this kind of Congressional dispute.”
“We have never seen our country this divided.” (although our ancestors who fought in the Civil War would beg to differ on this one!)
The problem with saying or feeling “this time is different” is that you are, in essence, giving yourself an excuse or permission to go against ALL of the historical evidence that the stock market has always recovered. In fact, so far in history, the market has recovered 100% of the time that it took a dive. Not 90% of the time, not even 99% of the time. 100% OF THE TIME.
Think with your Head, Not with your Stomach.
So take a moment now to prepare yourself mentally for what you will likely be feeling at some point over the next year or so. It will very likely sound very scary to be an investor. So I say again, it is entirely normal to be fearful or anxious about your retirement savings in times of great uncertainty. What is NOT normal or prudent behavior though is to ACT on that fear by doing something rash like bailing out of your investments or stopping your retirement account contributions. Be very mindful of your emotions taking you down the “this time is different” road.
Secure Your Retirement Savings with Blooom
At Blooom, we have a deeply rooted belief that the biggest opportunity we have to add value to our clients is by properly inoculating you from all the nefarious forces working to deplete your retirement savings. More so that standing guard against hidden fees in your portfolio, more so than making sure you have a balanced, appropriate mix of investments in sync with your retirement goals – Blooom aims to arm our clients with the proper perspective and truths to help each client make smarter decisions with their money. Often times this centers around managing emotions (fear and greed) when it comes to our clients’ life savings.
We know that countless individual investors will make terrible decisions with their retirement savings in future times of great uncertainty and fear – we just want to help prevent OUR clients from doing such.
Click here for a free analysis of your portfolio and see what Blooom can do for your retirement plan today!