With Hurricane Irma now in the rearview mirror, I can gratefully say how lucky we were. My home sustained minimal damage and we thankfully never even lost power. However, we had no internet, we had no cable, our cell service was spotty at best and we had no landlines. As we were busy trying to regroup and clean up, we learned that our air conditioners had been leaking, our dryer was the victim of a power surge and our pool heater had sprung a leak virtually draining our pool!
As I lay in my bed that night, taking for granted the cool air blowing from our vents, I reflected on all the issues my house had and, despite my exhaustion, I couldn’t sleep. So I turned on the tv and was instantly captivated by pictures of homes that were completely destroyed and businesses that were decimated in the Caribbean and South Florida. I saw roads that were flooded and I saw the profound sadness and fear in the eyes of the people who lived in these homes and who depended on these businesses for their livelihoods. And here is the incredible part, these people were talking about how lucky they were – they had survived. They exuded confidence as they promised that they would rebuild – better and stronger than ever.
And here I was, unable to sleep, over a dryer, a pool heater and a little aggravation.
It’s amazing how caught up we all get in our own little worlds. My problems very quickly did not seem like problems at all. I was lucky I even had a dryer or a pool heater that needed fixing! Day to day occurrences that seem like big deals at the time are barely even a blip on our radar a few days (or sometimes even hours) later.
The same is true of investing. Market declines are part of investing and if you watch the market on a daily basis, you will be overcome with emotions as day-to-day movements can seem quite drastic. But when you look at the performance over time and especially long periods of time, you can barely make out the day to day fluctuations. All you can see is the consistent upward trend. Time provides perspective and it enables you to focus on big-picture trends as compared to irrelevant minutiae which is what long-term investing is all about.
So as life throws us curveballs before we react and panic, consider our perspective. Many peoples’ lives were forever changed by Hurricane Irma, but it is my guess that when they do eventually recover and rebuild their lives, it will be stories of gratitude, perseverance, and progress that will prevail. When the market goes down, while it will not be pleasant to watch your portfolio temporarily decline in value, it will also be an opportunity – an opportunity to invest more at lower prices, an opportunity to test your resolve, and an opportunity to confirm that you can weather such a downturn because of the well-thought out and crafted financial plan that you have in place. It’s amazing what a simple change in perspective can do.