Have you ever read a newspaper headline, a doomsday book, or heard a TV pundit spouting about the “crisis of the moment?” Were you fearful? Did you feel as though you should “do something” to react to the situation? There will always be day-to-day drama here in the U.S. and around the world, but the question you should ask yourself is this – If I have a solid personal financial plan will this “crisis” affect my plan?
We encourage our clients to ignore the noise – the persistent, “crisis of the moment” chatter the media intentionally creates to draw-in viewers and radio listeners. Remember, they have a job to do. They sell commercials and advertisements. They are good at creating strong feelings of fear and worry so that you’ll tune-in.
Have you ever worn Bose® noise cancelling headphones? We are told they work really well. As an analogy, we suggest you wear them, so that you can tune-out the negativity of the media.
Have you read or heard anything about Greece and the country’s debt issues in relation to the Eurozone the past few weeks? Whether or not a 3rd round of financing was negotiated is important, but let’s put the “crisis” into perspective before concluding whether you should have “done something” to react to the situation. According to the World Bank, Greece had a Gross Domestic Product (a measure of its economic output) of $237.59 billion in 2014. As a country, they ranked 44th with less than 0.30% of the world output; a relatively small piece of the world pie. And if Greece were a state in the U.S., it would have only ranked 25th. The impact of what happens to Greece in the Eurozone is historic, but it alone doesn’t threaten the world economy.
The point here is simple. There will always be a “crisis of the moment”; an event, or even a series of events, that will cause the markets to lose ground. There may even be a market correction (yes, that happens). But the important thing you should remember is that when you have a personalized financial plan supported by a good portfolio (broadly diversified, low cost, and long term in focus) your circumstances are less likely to be impacted. The minimal affect these moments have on your own plan should allow you to focus on your long-term financial success. Ignore the noise.