Don't Let Fear Sabotage Your Future

Fear can be a potent motivator.  Sometimes that's good, and other times it works against us.

I am fearful of growing old in poverty, so I save and invest.  While the fear motivates me, I do not let it sidetrack me.  Studies of the fight-or-flight instinct genetically encoded into our brains has shown to have a negative impact on investing.  Rather than riding out ups and downs of the stock market, those who panic pull out when prices drop. If they want back in, they wait until the market looks better -- and end up buying at higher prices.  If those funds had been left in place, they would have realized gains during the rebound that followed.  Continuing to invest during market dips means we are buying low and will realize gains later.   Balancing our investments help us spread the risk so that not everything tanks at the same time.

I'm not a financial advisor, and what I've just written is common knowledge.  But why am I posting this  now?  Simple, I have two opinions to express today.  And they are just that; opinion.

I urge citizens of the United States to vote on Tuesday.  Having the right to participate in elections is a precious privilege.  One that we should be proud to have an use.  Regardless of who you want to vote for, get out and vote.  And please, don't try to discourage others from voting just because you don't like who they may cast their ballot for.

Next, don't panic.  Regardless of who wins the election, don't buy into doomsday fears.  Don't feel you need to pull all of your investments out of the stock market and pay off your house.  The world is not going to end.  Even if the market dips, it will rebound.

Eight years ago, we saw and read about folks preaching gloom and doom, pushing gold as an investment, encouraging us to stock up on seeds, quit our jobs, stockpile food and weapons, be ready for the apocalypse.    None of that happened.  I'm not one to gamble, but my bet is that a similar narrative will arise after this election.

But my truth is this:  I kept investing after the last election.  I didn't pay off my house and high-tail it out of town.  OK, I did sell my house and buy another -- and took on another mortgage.  The result?  I have tons more money invested today than I did eight years ago.  And by that, I mean a substantially greater amount (probably double, or more).  I didn't lose money; my money grew because I did not panic, pull it out of the market, and I continued to add more.  I also didn't walk away from civilization.   Together, in our small life, our income has risen about 50%.  We have more equity in our home than ever before -- and we still have a mortgage.

This same scenario was the case after every election, some of which brought candidates I voted for into office, others bought in candidates I despised.  Regardless of political cycles, we never threw in the towel, we never believed the world would end, never thought we were screwed.

I do think that if we did buy into the fear, we would have been screwed.  Planning your actions based on fear never allows you to make the best or most rational decision.  So my soapbox message today is to cherish your right to vote and exercise it -- but don't let the results make you do anything drastic or crazy.  The US is a wonderful place to live and we are good people. Just because we don't like our current leader doesn't negate our worth.  It shouldn't give us reason to hate or destroy.  You can grow in good times and bad and however anyone takes the results, I hope they manage to resist fear and act in a positive fashion.

Now, get ready to vote!