In the Financial Informer Second Quarter 2020, we discuss the steps to take when dealing with the COVID-19 financial crisis.

Frankie says Relax

Two things about the title to this story: One, only 80’s kids will get it and two, Holly Johnson (the lead singer of Frankie Goes to Hollywood) can afford to relax because he is no longer on this earthly dimension. As for the rest of us still alive, we may have a few concerns at the moment.Financial informer

You already know the rational steps to take during a financial crisis: Don’t look at your RA or investment portfolio. Don’t stay glued to the financial press and, above all else, do not panic-sell your in-vestments.
And yet: As Mike Tyson put it, everyone has a plan until they get punched in the mouth.
A generation of investors is experiencing its first genuine financial crisis. For many millennials, no amount of rational thinking can ease the pain of the first time you watch a fifth of your life savings evaporate in a few weeks.
As a guide to this pain, some seasoned investors who have been around this block before, having seen crises reaching back to Black Monday of 1987 offer some perspective. They’re here to offer calm and a few tips on dealing with the crisis, mentally and emotionally.

 

 

Fight or flight

“I will admit to feeling concerned about the coronavirus. As the world has not experienced this virus before, we can’t reliably predict how it will evolve and how many people will be impacted,” says 10X Investments chief executive officer, Ste-ven Nathan.

Financial informer

 

“Life is always uncertain – no one knows what will happen tomorrow. I tend to refer back to guidance gleaned from Dale Carnegie’s “How to stop worrying and start living”. This timeless classic, written in the 1950s, tells us that most of the things we worry about never actually happen.
“It also urges us to worry less, especially about things we can’t control.”
A useful piece of advice in this book is to write down our fears, including what impact they might have should they materialize, which can help us prepare mentally for the worst. Then we should calmly try to improve on the worst case, Nathan said.
“I try to follow this advice when faced with uncertain issues, like the corona-virus. I have thought about what the impact might be and worked through an action plan should it materialize. I feel better even though I still don’t really know how it will play out. And, no, I have not stocked up on non-perishables,” he said.

 

Read the Full Article Here

 

 

 

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