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I was scheduled to travel to Germany from DC during the first week of March and had been looking forward to the two-week trip. I thought the European travel would give me time to see the sights, write, and rest.
But then news of the spreading coronavirus and its fallout began to get worse, and I read about travel restrictions, quarantines, illness, and deaths. It was sobering - and really sad.
As I hoped for the best, I realized I needed to cancel my trip. In the days that followed, I watched the markets fall and saw worldwide news continue to worsen.
But even though reports have been rough, I'm not panicking. And even though I've changed my travel and social plans to be cautious, I haven't changed my investment plans.
Here's the thing: My travel plans affect the present, so I needed to change them to help protect myself and those around me. But I don't need to change my investment plans, because those are long-term. Even after noting losses this week in my retirement and other investment accounts (some extreme), I'm staying the course.
There are a few reasons why I can remain calm about my finances. Even in the midst of chaos.
The first is that, thankfully, I have savings. When I was growing up, I learned to save in case of emergencies. My existing emergency fund means the money I have in the market isn't money I need right now. So when a couple of my accounts are bleeding red (deep sigh), and others are declining, I know my savings are my safety net.
The second reason I'm not flipping out is because I believe the market will expand again, as it has in the past. Even after the last recession, recovery began again. And earlier this year, stocks closed at record highs. So, for my retirement accounts in particular, I have time to wait.
I know it can be hard to remember that the market will turn around, and things can seem scary. But I'm trying to remind myself - and others - of that truth.
For instance, this week I was texting a friend about my investment losses and the possibility of a recession, and she revealed she kind of wanted to pull money out of her retirement account. I understood why, but advised her not to - we're both in our 30s and have years to go before we're even eligible to withdraw retirement funds without penalty. Things may get dark, in finances and in life, but I trust better days will come.
The third reason I'm fine is because I know the investment arena is no place for emotions - and it's impossible to time the market.
Though I appreciate emotions in other areas, I understand I shouldn't make financial decisions based on sadness or fear. (I say this as a creative person capable of varying feelings, sometimes all at the same time. And as a person who's felt fear but pushed through.) So I choose to follow my logical plans, and logical advice, and to control my mindset as much as I can.
Does it hurt to see my portfolio down? Sure. But will that temporary hurt matter years from now when I'm ready to withdraw my money? I don't think so.
I don't like what's happening right now. But I'm going to keep following the news and reviewing my accounts as it makes sense. And stay securely seated on this financial rollercoaster. I accept the dips like I accept the highs; both are part of the ride.
I'll also continue to maintain an emergency fund, save for retirement, and stash funds in after-tax accounts so I can benefit from investing over time.
Finally, I'll keep an eye on a few equities, because a market decline means some stocks can be snagged at bargain prices. And, let me tell you, I always appreciate a good sale.
No matter what, I have a plan. I'm not panicking. And, in time, I think my accounts will be okay.
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I changed my travel plans because of COVID-19, but there are 3 reasons I'm not changing a single thing about my investment strategy8 smart things to do with your money in the time you would have spent commuting5 ways opening a credit card and using it responsibly can boost your credit score3 places to put your money when you can't stomach any riskCopyright © 2024. Times Internet Limited. All rights reserved.For reprint rights. Times Syndication Service.
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