I got COVID for the second time about a week ago. I am fine because I’m here writing this blog post. I had a bad case of sniffles and a runny nose for two days, and then I was pretty much back to normal. Tested negative less than a week later.
Being sick wasn’t without consequences. I had to cancel hosting a birthday party for an 80-year-old. I missed my favorite class at the gym. I had to slog through a few business webinars, barely able to concentrate. I missed a conference because it felt wrong to fly even though I felt fine. For two days, I felt very pathetic, sorry for myself, and had a mild panic about what would happen if I died. (It’s okay to roll your eyes at me.)
Chances are extremely high that in a month or so, I probably won’t even remember I was sick. The party will get rescheduled, I’ll get back to the gym, I’ll ask colleagues about the conference, and I’ll hunt down the webinar recordings. In the scheme of things, I’m fine.
Market Downturns Are Like Your Portfolio Catching COVID
Like human beings, the markets can have bouts of “illness.” Your account values can go down. It feels bad. You can feel sorry for yourself. You can engage all the doomsday thinking you want. You might make some lifestyle changes or cancel events.
Market downturns are not caused by a virus, and they’re not always contagious. Frankly, if you’re not feeling icky about some part of your portfolio, you’re probably doing something wrong. As illness is part of the human condition, market downturns are part of the investing condition. It doesn’t feel good and is rarely fatal.
Be Mindful of the Uninformed and the Loud
What was a little crazy about my getting COVID were the reactions of people around me. I was slingshotted back into 2021. Who did she get it from? How could she bring it home like that? Isn’t she vaccinated?
News flash: The severe pandemic restrictions have been long over. I have been going about my life. Yes, I’m vaccinated five times over. I engage in risky behavior like going to the theater and the gym – sometimes in the same week! I know … the audacity.
Similarly, you should be living your life, not worried about what might happen to your portfolio. Manage your career and/or your activities. Live within your means. Save money if you’re in money-saving mode. Love the people around you. You’re probably already doing these things.
Illness as an Upgrade
Know that you or your portfolio will have a bout with illness. Plan for it. Expect it. Don’t be surprised if the news gets louder and your critics get meaner and more unreasonable. How could you have been invested in the market? Couldn’t you see this coming?!
Getting any illness is a health upgrade of sorts. Arguably, for some time, I have had additional immunity to some viral plague.
The same goes for portfolios. If you do it right, a market downturn is an opportunity for an upgrade. Do some tax-loss harvesting and take some money off the table tax-free. Buy some investments at a discount (watch the wash-sale rule). This gives you a better shot at greater returns and a stronger portfolio going forward.
Human or portfolio illness is a drag, but it’s rarely fatal. Keeping the drama to a minimum and the upgrades to a maximum set you up for a stronger future.
If you want to talk about any part of your portfolio, please reach out.
About the Author:
Jessica Lanning JD, CFP® brings focus and perspective to your individual financial needs to identify your opportunities for investment and wealth. Regardless of what you’ve done before or what “mistakes” you think you’ve made, Jessica can help get you back on track quickly and safely. As a former practicing lawyer, she brings a comprehensive approach to legal, tax, and financial challenges so that her clients can enjoy peace of mind. A huge proponent of conscious decision-making, Jessica makes sure her clients are educated and informed so that they make sound decisions with clarity and confidence.
Lanning Financial Inc. is a registered investment adviser. The information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.