When the Market Gives you Lemons…
I try to be optomistic in everything I do. Like when my beloved Chiefs start out 1-4, I remind myself that this is a rebuilding year, and at least they will probably get a good draft pick next year. Or when I play a really horrible round of golf (worse than usual), I try to focus on how nice the weather is that day. But in this market, it’s been tough to stay positive - really tough.
After some thought, I have come up with a few positive things, or at least opportunities, to think about:
- Gas is cheaper. Let’s assume the average family drives 30,000 miles a year. Gas is about $1 less per gallon here in the Midwest. Assuming you average 20 miles/gallon, that’s a savings of $1500 per year.
- Investment opportunities. I believe that we have witnessed some panic selling recently, which may indicate the market is a bit oversold. This should present some good buying opportunities if you have a long-term investing horizon.
- This condition is not permanent. We have been in this downturn about a year. Bear markets on average last 14 months.
- This market is a great learning opportuity. Always be mindful of when you anticipate needing your retirement money. It’s easy to get caught up in being overly-aggressive when the market is doing well, but bull markets are not permanent either. Make sure that you scale back on your risk as you approach that retirement date. Even when times are good, the next bear market may be just around the corner.
- Lifestyle changes - As much as I hate to say it, some Americans became too comfortable living beyond their means. This market has forced many of them to make lifestyle changes that will enable them to be more financially responsible in the future.
If you are interested in reexamining (or establishing) your budget, go to our calculators page (in the Tools and Resources section) and use the link at the bottom to access a free excel budgeting tool.
Remember that during every bear market, most investors feel hopeless and become discouraged with investing; often at just the wrong time. Things will once again become good in America, so stay positive and enjoy some financial lemonade - I believe better times are ahead.
Kevin Jaegers, Senior Investment Advisor
