Ready for a headline you’ll never read anywhere again?
Today’s Market Fluctuations Will Not Impact Your Long-term Financial Security. Please feel free to pay attention to something that actually matters.
That kind of news won’t play. The networks that broadcast to our every waking moment need our attention and nothing seizes attention like anxiety. The talking heads give us two manic impressions:
- Everything is falling apart and you should get out now, or
- Everything is going to the moon, and we should panic about missing this rare opportunity.
Remember that in order for the media outlets to make money, they have to sell ads. In order to sell ads, they have to keep us glued to the screen. To capture our attention around the clock, the media has to play on our fear by trapping us in the middle of these two stories. They trick us into believing that something happening today that we have no control over will have a devastating impact on our life. They distract us over and over with trivial episodes that will not affect our success in the long run. These distractions empower our real opposition-fear, anxiety, and worry.
As the president of Wealthquest, a company that helps people manage their finances, I have seen the sickness of the Age of Anxiety. I’ve seen couples move all of their investments in balanced portfolios into cash, forfeiting a conservative six percent return in favor of a guaranteed zero percent return. They trade a high likelihood of success with some volatility for a return that almost guarantees their failure. They feel better. But they are worse off for their long term plan. Then, when their fears of calamity don’t come true, they have to deal with the worry of what they missed out on. They end up jumping back in at a relative high in the markets, and when things fall back down, the cycle starts all over again. I have seen this vicious cycle steal so much from families. People become obsessed with trying to control the uncontrollable, and in the meantime, they miss out on living life. Ironically, they also inch closer and closer to their fears actually coming true.
How do we take the fangs out of our worries? We can’t push them out of our minds; we have to look them in the face. I have used two questions to help me and my clients overcome anxiety.
First, what thought is powering this worry? Many times, worry is really hard to pin down. Anxiety is a nebulous foe. We just FEEL it. But, all of our feelings are rooted in a thought. The key is to take a moment to isolate that thought. If we really understand the source, we find that the thoughts sound something like this. We’re afraid that since the market went down three percent, we will lose all our money. We’re afraid that if we miss an opportunity, we’ll never find another one like it, and none of our dreams will come true. We’ll never have enough money for retirement. Most of the time, the thoughts that drive the worry we feel are directly tied to the two stories being shouted at us. We think we will be ruined by financial disaster, or that we will be ruined by missing the only chance we will have to succeed.
Now, the big question: Are these thoughts true? Chances are, the thinking that shakes our emotional world is not even close to the truth. If we’re following a strong financial plan, a missed opportunity won’t doom us. A market dip is something we expect as much as a market surge, and neither one really changes anything in the long term. We’re spending what we’ve decided to spend and we’re saving what we’ve planned on saving. In the small realm of what is under our control, we are doing what we are supposed to be doing. We neutralize the worry with the truth. We find joy where we once found only fear.
But what if the thoughts feel true? What if you can’t confidently say that you know you are doing what you are supposed to be doing? Simple: Reach out. Let’s get you a plan for the long road ahead, one that mutes the false concerns and gives you confidence in your future. Then, you can feel free to pay attention to what really matters.
James Lenhoff is the President of Wealthquest – a Cincinnati based financial planning and wealth management firm that offers a full range of financial services under one roof, for one simple fee.