Life and the Stock Market
Both life and the stock market can be unpredictable. Sometimes it seems like everything is going smoothly and the future looks bright, and then something no one could predict happens. As of today, the markets are looking strong and companies are reporting healthy earnings. No one knows when this will end, or if growth will slow just like no one knows what the future holds in life.
Life is full of surprises. Just when everything seems like it’s perfect and normal something good or bad can happen in an instance. My mother passed away 2 years ago April. It was unexpected and very traumatic for me and my family. She was the glue that kept us all together. Since her passing, we have had to adapt and make changes in our lives. We all wish she was still here, but she’s gone, and she won’t be coming back. Our memories of her keep us going and those will never go away. I have 3 brothers and I can tell you that sometimes we don’t all get along, but we have all made the extra effort to stick together and for that I am thankful.
A good friend of mine was recently diagnosed with cancer in the prime of his life. It was unexpected and if you knew him you would think he was totally healthy. Now, he must adjust his life to treating his cancer while taking care of his family at the same time. It’s not an ideal situation by any means and it will be a major adjustment for him and his family. No one could predict he would be diagnosed with cancer, but it happened just like no one can predict what the market will do tomorrow, the next day, or a year from now. His doctors will have to come up with a plan to treat his cancer, just like investors should have a plan on how to invest for and during retirement.
Last year the stock market grew by over 30 percent. No one could have predicted this type of move in the market. We had just experienced a correction of close to 20 percent in December of 2018, and many investors were panicked to say the least. If you sold your stocks during that time, you had zero chance of recovering any of the losses you may have incurred. Therefore, we believe it’s important to always have a strategy or plan to get through the emotional experience of loss. We feel very strong emotions when it comes to loss, much more than when we experience the positive. The market and life are very alike in the sense that the emotions we feel affect the decisions we make on how to deal with the ups and downs.
Planning for the future is difficult due to its unpredictability. The one piece of advice we give our clients is to always have a plan. Having a plan in place will eliminate many bad decisions made in life as well as with investing. At Chapman Capital Advisors, we create financial plans for our clients. We adjust those plans when they need to be adjusted due to the changing market climate. We utilize low cost investment strategies that can be adjusted at any time and avoid products that lock you in to a specific time frame. After all, no one knows what the future holds.