Finance Trade wars with China. Real wars in the Middle East. Brexit. Increasingly polarized politics in the U.S. − and everywhere else. Continuing uncertainty over climate change. If you’re looking for an argument as to why now is not the time to invest, there as certainly no shortage of reasons to sell everything and stuff the proceeds under your mattress. But let’s face it: that’s not really a viable alternative for most snowbirds. For those of us who live at least in part on the income generated by our investments, we need to put our money to work − and keep it working for us − no matter how “interesting” the times may happen to be. But that brings up a bunch of critical questions: how exactly should we invest in these “interesting” times? How can we put our money to work and keep it working for us, while protecting it from the various political and economic crises (both real and imagined) which crop up with alarming frequency these days? How can we prevent ourselves from becoming financially “paralyzed”; so fearful of doing the wrong thing that we fail to do anything at all? With that inmind, here are some tips and hints, various ideas to think about and a few practical “how-tos regarding how you can invest wisely and safely, no matter how “interesting” these times eventually get. Twelve tips for protecting your finances and your portfolio from dangers, problems and crises By James Dolan 1. Understand your emotions First things first: the most important thing to keep in mind when it comes to crises, issues, problems and other “interesting” events is to understand what’s actually going on inside your mind. That is, how your emotional outlook may be affecting your perceptions of what’s going on, and the actions which you take because of those perceptions. Veteran investors have always known that market movements are driven as much by investor psychology as by economic events or political change. And that psychology has only grown more pronounced with the advent of round-the-clock political news and up-to-the-minute investment information (see below). Which is why during “interesting” times, it’s a good idea to look in the mirror. Ask yourself: have you found it difficult to keep fromworrying about the day-to-day portfolio movements? Has it become more difficult to tune out negative news and commentary without feeling anxious? Do you find yourself becoming more pessimistic about the current political climate, or the economy, or both? Nothing wrong if you do. Remember: you’re not a robot. True, volatility has always been a part of investing (and it always will be). But when the market experiences volatility (and it will), even veteran investors can sometimes get a sinking feeling in their stomachs. And when it experiences a proper downturn (and it will), those feelings will only increases. So, instead of trying to be indifferent and dispassionate (and failing at it), learn to recognize when anxiety starts to interfere with your investment decisions. Understanding when it happens is the first step to making sure that it doesn’t happen. How to deal with “interesting” times 32 | www.snowbirds.org
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