In theory, planning effectively for your future is a very simple job. All you really need to do is spend less than you earn, invest a portion of your wealth, and protect yourself against unexpected problems.
When you’re in the right frame of mind, it’s easy to act responsibly and make decisions that will benefit you in the long term. But when things get stressful and the daily grind starts to wear you down, it becomes much more difficult.
In the past few months, the media has been full of negative stories that can cause you a serious amount of stress. When you’re in this negative mindset, it can be easy to lose sight of what really matters – your family’s financial wellbeing.
If you do, you may find that you make short-sighted decisions that could hurt your long-term prospects. To avoid this, read on to find out how to tune out distractions and stay on the path towards your goals.
It can be easy to make spur of the moment decisions when you feel overwhelmed
If you want to reach your long-term goals, it can be important to tune out the “noise” that distracts you from your plan. This can be any negative news or information that shifts your focus away from your long-term goals and towards short-term concerns.
The invention of the internet has benefitted us in a wide variety of ways, revolutionising the way we live and work. With a simple device that fits snugly in your pocket, you now have access to more information than a man with a whole library at his disposal would have had 100 years ago.
Of course, the downside of this is that it can be easy to get overwhelmed with the sheer amount of information. This is especially true during difficult periods, when threats of war and fears of economic recession can leave you feeling anxious and worried about the future.
With so much to distract you, it’s understandable that you might not always be in the right mindset to make clear long-term decisions.
On top of this, when you’re stressed it can also be easy to act rashly, just for the sake of feeling a sense of control. For example, if the value of an asset suddenly falls it can be tempting to sell it, even if it’s not the right decision in the long term, just to feel like you’re being proactive.
Looking to the past can help you to keep a clear head
When the future seems worrying and uncertain, it can often be helpful to take a step back and look at the past. As Mark Twain once drily remarked, while history never repeats itself, it does often rhyme.
Markets tend to move in cycles. So, while you can never predict the future, knowing about the past can help to give you an idea of what’s just around the corner. When you look back, three facts become obvious and can help to put things into their proper perspective.
The first is that there will always be a “current thing” that creates short-term uncertainty.
Just like how we worry about the pandemic and the war in Ukraine, 50 years ago investors were stressing about the OPEC oil crisis and tensions in the cold war. Another 50 years before that, they were worried about the general strike and the rise of fascism in Italy.
The second fact is that despite the seemingly never-ending string of crises, global stock markets have repeatedly overcome their obstacles and continued to grow. Even when they do retreat, the downturn is usually only temporary.
Thirdly, even if there is much wrong with the world, it’s also true that for many people, it has never been such a good time to be alive. Even if the media is full of doom and gloom, we still live far better lives than our parents and grandparents did.
So, when you’re bombarded with noise, focusing on these three facts can help you to keep a clear head and stay on track.
Working with a financial planner can help you to make informed decisions
At the end of the day, investing in a calm and rational way can often be much trickier than you think. That’s why, if you’re struggling to do so, you could benefit from seeking professional advice.
When you work with a financial planner, you can benefit from our years of experience and in-depth knowledge of markets, which can help you to keep a cool head during periods of uncertainty.
Furthermore, we can also act as a valuable sounding board when you make a decision, enabling you to weigh up some of the pros and cons before you act. This means that when you do, you can be confident that it’s the right choice for your circumstances.
Get in touch
If you want to know more about how working with a planner can help you to keep a level head when investing, we can help. Either contact your financial planner directly, email us at hello@ascentawealth.com or fill in our online contact form to organise a meeting and we’ll get in touch.
