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Investing in Uncertain Times: Can it be a bed of roses?

July 17, 2020

My answer? A resounding, Yes! While everyone else turns into a "Nervous Nellie" you can relax, enjoy, and even look forward to uncertainties in the markets. But how?

For starters let's talk about health, instead of wealth, for a minute.  Do you or a loved one have your own story of cancer?  A heart condition?  Some other health scare?   From the onset of symptoms, to diagnosis, to treatment and/or surgery, to monitoring … I wager you faced a great deal of uncertainty and fear.  That said, while emotion was most definitely present, I'm sure you pushed through to find good advice, to make a good plan, and to do the necessary things to give you a better outcome.  

Ok.  Let's switch to wealth and investing.  We all have financial stories of uncertain and fearful times we've lived through.  Y2K … 9/11 … the ‘08 Real Estate Bubble … COVID-19 … just to name a few.  When we see an eye-catching headline, we naturally want to learn more.  To try and make sense of it, we're conditioned to dutifully plug into the never ending stream of 24/7 news only to hear such things as:  

“Buy stocks!  Sell stocks.  Cash is King!  Cash is Trash.  Annuities are great!  Annuities are horrible.  If so-and-so is elected the economy will be great.  But if you-know-who is elected the economy will be horrible."  

If we pause to ponder the barrage of so called advice in the news, hopefully two things become abundantly clear.   

First, the media’s job is to get you to "tune in" to their very precious news channel by any means necessary.  Media gurus are well aware of the power of emotion, perception, and the science behind it to shape people’s actions through the use of simple psychological tools.  Case in point, just through simple headlines these "objective" pundits can invoke mass fear, greed, envy, and ego to routinely tweak, push, and ultimately produce a desired outcome that often is not in the viewer or listeners best interest.  Whether for buying a product, influencing an election, shaping public opinion, or even turning good into evil and vice versa ... this is normal business practice and shows no sign of changing.    

Second, the perfect investment doesn’t exist.  Sorry you all ... but gold, real estate, CDs, stocks, bonds, mutual funds (yes, even index funds) … you name it … have plenty of good AND bad imbedded in their nature.  Investments are also simply tools.  Tools can do much good but, if misused, the very same tool can also do much harm.   

So, what should we do with the dizzying array of financial tools at our fingertips if we’re not proficient and/or comfortable handling them ourselves?

Turning Uncertainty Into a Bed of Roses

3 Investment Keys:

#1: Know when to TUNE-OUT.  As already mentioned, not all financial news is useful news, and much of it is just noise.  Investment generalizations are just that and geared to the average Jane or John Doe, who of course don’t exist.  If you don’t know what to filter out, the damage caused by random recommendations and actions can be devastating.  

#2: Know how to TUNE-IN.  You need a competent PFD … a Personal Financial Diagnosis.  Your PFD should look at your: history; current situation; and your understanding of potential investment "treatments" that are available to you.  Just like your health may require certain tests like bloodwork, CT scans, MRIs, etc., certain tests may be prudent to look deeper into your financial health.  A diagnosis and treatment for the masses from a radio or TV show doesn’t make sense in the medical world, and it doesn’t make sense in the financial realm.  

#3: Know where to TUNE-UP.  You are your own best advocate.  But, if you’re not willing and/or able to objectively do this for yourself, you need to find someone to coordinate your financial healthcare.  Find an advisor who can look across the investment, banking, and insurance landscapes ... ALL of them ... to find treatments tailored to you.  And, he/she should take the time to educate you, and YOU should take the time to be educated.  The more you know, the better questions you can ask, and, the better prepared you'll be to adapt to life's changes.  

NOTE:  BTW, a real "advisor", or consultant, should take the time to get to carefully know you, your concerns and fears, as well as your goals and timelines BEFORE discussing recommendations.  Otherwise, is it really advise?  Or just a sale?  

So I'll conclude with this.  When it comes to investing, we're always in uncertain times.  Some are more dramatic than others. Don't let drama and emotion dictate your financial healthcare.  Get advice … make a plan … remain flexible … control what you can … don't worry about what you can't.  Do this and, whatever you face with your health or your wealth, you'll be in a much better position to take advantage of uncertainty while everyone else is off being a Nervous Nellie.  And, it just may put you in a state of mind where you can follow my dad's frequent advice... "take time to smell the roses".