How to Stay Calm During Difficult Economic Times
My husband and I have a significant (to us) amount of money invested in mutual funds. The failure of the Wall Street bailout to pass the House caused the Dow to drop 777 points yesterday – the largest one-day point drop in history.
I track our investment portfolio in Microsoft Money, and when I signed on yesterday, I nearly had a stroke! We lost $1500. In ONE day. Add that to the consistent quarterly losses that we’ve endured over the course of the last year, and you have the formula for severe depression.
I’m not a person who is comfortable with financial risk, and a loss like this is very upsetting to me. I know that we’re not the only people in this situation, and while I’m not a financial expert by any means, I do hope that I can offer some words of comfort to those of you who may be struggling with fear and anxiety during these trying economic times. Here are just a few thoughts:
1) Don’t panic! Remember that retirement investing is long term investing, and people who wait out dips in the market are typically much better off in the long run than those who panic and sell. Timing the market usually doesn’t work – don’t make long term mistakes based on short term events.
2) Remember that there have been markets like this before. In the 11 years that I’ve been investing, I can remember 2 – 1998 and 2002- and each time it felt like the world was coming to an end. However, each time turned out to be much shorter lived than we thought it would be. In 2002 we had a definite recession, and some stocks that lost two thirds of their value regained it all within 12 months. While past performance does not guarantee future results, this is still encouraging to know!
3) Now is the time for thrift. If you haven’t started saving toward an emergency fund, start now! Even if you can only save $10 a week, it’s better than nothing! Your ultimate goal should be to save 3-6 months of gross income. My husband and I currently have 6 months of gross income in a savings account that yields about 3% interest. I can’t tell you what a comfort that cushion is to us! We know that if my husband gets hurt or sick, or his workload drops drastically, we have something to fall back on. During scary economic times when everything seems out of control, frugality can help you regain control of your money, which will help you feel safer and less anxious.
4) Trust in the Lord. This is the most important advice I can give you. I’d like to share something from my Bible, which I have turned to over and over during times of fear, stress and anxiety:
(25) “Therefore I tell you, do not worry about your life, what you will eat or drink; or about your body, what you will wear. Is not life more important than food, and the body more important than clothes? (26) Look at the birds of the air; they do not sow or reap or store away in barns, and yet your heavenly Father feeds them. Are you not much more valuable than they? (27) Who of you by worrying can add a single hour to his life?
(28) “And why do you worry about clothes? See how the lilies of the field grow. They do not labor or spin. (29) Yet I tell you that not even Solomon in all his splendor was dressed like one of these. (30) If that is how God clothes the grass of the field, which is here today and tomorrow is thrown into the fire, will he not much more clothe you, O you of little faith? (31) So do not worry, saying, ‘What shall we eat?’ or ‘What shall we drink?’ or ‘What shall we wear?’ (32) For the pagans run after all these things, and your heavenly Father knows that you need them. (33) But seek first his kingdom and his righteousness, and all these things will be given to you as well. (34) Therefore do not worry about tomorrow, for tomorrow will worry about itself. Each day has enough trouble of its own.”~ Matthew 6:25-34
This passage contains 7 reasons why we should not worry:
1) The same God who created life in us, can be trusted with the details of our lives. (6:25)
2) Worrying about the future hampers our efforts for today. (6:26)
3) Worrying is more harmful than helpful. (6:27)
4) God does not ignore those who depend on Him. (6:28-30)
5) Worrying shows a lack of faith in and understanding of God. (6:31, 32)
6) Worrying keeps us from real challenges that God wants us to pursue. (6:33)
7) Living one day at a time keeps us from being consumed with worry. (6:34)
“Keep your lives free from the love of money and be content with what you have, because God has said, “Never will I leave you; never will I forsake you.” So we say with confidence, “The Lord is my helper; I will not be afraid. What can man do to me?” ~Hebrews 13:5-6
Remember that God loves us, and He will see us through these difficult and frightening times. We can always depend on Him!