In life we all experience times of trouble or difficulty.  In fact, life tends to cycle from good times to bad and back again.  But when rough times come, seldom is it a good thing to panic… to react by making decisions out of fear or emotion, or even worse, to run from the trouble at hand.  One thing I’ve learned recently is when life has it’s difficult times, we are wise to lean into those troubles and work through them.  And we aren’t successful in this by doing it alone… friends help, mentors, family and even God is there with us in the midst of our troubles.

Financially speaking, we must realize that our investments will also face turbulent times.  Just as in life, markets cycle and various investments go in and out of season.  The real question is when the volatile times come, how do we handle them?  A little encouragement is to avoid two common mistakes: don’t react on emotion, and don’t try to face these times alone.  When working with a financial advisor you aren’t alone.  They can provide objectivity on your portfolio and help you through choppy markets.

The other lesson learned is that we do eventually get through the rough waters (at some point). Of course, stock markets don’t recover overnight.  On average one 20% correction occurs every five years, but their recovery times vary.  According to Bloomberg, in 1974 the market suffered a -37% loss and took over five years to recover… but from 1981-1982 the market suffered a -25% correction and only took 83 days to recover.  And of course we are recently familiar with the corrections from 2000-2002 and also in 2008.

So what do we take away from this?  In the tough times don’t panic and avoid making quick, emotional decisions.  Remember the proverb that states, “The plan of the diligent lead to profit as surely as haste leads to poverty.”