May I just start by giving huge kudos to all of my clients! You are amazing, the true heroes of this situation. This is an unprecedented time in our country and our financial markets. As a country, we have never faced a challenge exactly like this. And yet, despite these challenging times, you are staying the course, remembering that ultimately, the markets will rebound. I’ve only had two calls from clients expressing concerns about their portfolio after listening to the “noise” in the media, and I know that those two calls probably represent a larger number of you who feel the same way. So I want to commend you and encourage you to limit your exposure to the media and replace it with the knowledge that “this too shall pass.” It is always darkest before the dawn, but the light will shine again, and you will be rewarded for handling this situation with impressive discipline, diversification, and calm.
Speaking of calm, the Dow was anything but calm again yesterday. It fell 582 points, which, given the frustrating partisan wrangling in Washington over the stimulus package, seems like quite an accomplishment. Though we can’t know precisely when the bottom will come, when the stimulus bill is finally passed—and it will be passed—we are likely to see less volatility over time as federal assistance provides an important backstop for family support, small business relief, and the economy to be positioned to not only recover but to eventually thrive again.
But what can we all do now during these unprecedented times? Glad you asked! I have two suggestions for things that you can start doing today.
Create a Realistic Budget
First, let me recommend to all of you—both those clients who are taking regular distributions from your account and those who are not—that you put together a realistic budget for your monthly needs. Take a careful look at what you really need right now and develop a budget that aligns your monthly expenses with those essential needs. Take a page from a client who recently called and asked me to reduce their monthly draw in half; they had already reduced their budget to reflect their “needs”, not “wants.” What a great idea! If you can cut back your spending by 15 or 20 percent, that’s a smart move to make, and we can always revisit it when things start moving back toward normal. Personally, I like Mint.com for budgeting, but there are many other great, free budgeting tools that can help you take back a little more control.
Reflect, Reset, Renew
Second, and maybe even more important, while you’re considering what your real needs are, it’s probably an excellent time to think carefully about what is most important in your life. I’m calling this exercise the Three R’s: “Reflect, Reset, Renew.” In times like these, many of us are forced to remember what really matters most: our health, our family and friends; taking care of people in our communities; nurturing our faith; being the best friends and neighbors we can possibly be. These priorities are always vital, but in times like the present, they become a lifeline. And possibly the greatest benefit of these three R’s is that they pull us outside of ourselves and our own problems and worries and redirect us toward others. There is probably nothing better for your mental and emotional health than taking the time to do something kind for someone else.
I received a great and very practical piece of advice from my daughter, a therapist. She suggested that I picture what is most important to me and then find an image or picture that captures that idea. She told me to put that picture on the fridge, on the dashboard of my car, or somewhere else that will allow me to see it throughout the day. The idea, she explained, is to keep that focus constantly in mind. Whether I’m on the phone with clients, answering emails, or going to the grocery store, the picture reminds me that whatever I’m doing is ultimately because I want to take care of what is most important to me. In other words, it’s a way to reflect, reset, and renew.
We will get through this crisis, as we have gotten through others before. As we reflect, reset, and renew, let’s take full advantage of this important opportunity to become more engaged, more thoughtful, more loving to everyone who touches our lives. When we do that, we all become stronger—together.
Stay Diversified, Stay YOUR Course!
And…
Stay Your Social Distance, Wash Your Hands!
