March 25th marked the one-year anniversary of the day that Governor Jared Polis issued a “stay at home” order in Colorado to help stop the spread of Coronavirus. As we pass this 365-day mark, many of us are reflecting on what we have learned throughout the last year. Transporting back to those first initial days in lockdown, I can vividly remember the empty toilet paper aisles at the store, stacks of canned goods in the pantry, and sanitizing every foreign object that came into the home, all while reassuring myself that this would only last a few weeks before the return to normal. Ah, the naivety! As more and more of the population becomes vaccinated and begins to navigate a new normal, there are a few lessons that we can take with us that not only apply to our daily lives, but to the way we see investing, as well.
“Get while the Getting is Good”
We have all watched as the world shut down. Gatherings with friends and family were replaced with socially distanced hellos. Time at the theatre was replaced with hours (and hours and hours) of Netflix consumption. As we get back to normal life it is important to “get while the getting is good”. Take advantage of time with friends and family and travel while you can, because you never know what the future holds. The same lesson applies to long-term investing. As advisors, we are often asked “when will the next market downturn take place?” We know that a future bear market is inevitable, but instead of living in fear and anticipation of a market correction, embrace the years with positive market outcomes.
As People, We are Resilient
We have collectively made it through a very challenging time. With hope on the horizon as the vaccines continue to be distributed, we are reminded of the resiliency of the human spirit. Through many ups and downs, we continue to learn from each other and grow in this shared experience. It is important to keep in mind that as long-term investors the stock market is also resilient. The chart below depicts the S&P 500 over the last 90 years. We have seen many different market cycles, and history proves that with patience and time, the market should continue to see new heights.
Invest in Yourself
This past year has shown us how anything can change at the drop of a hat. Unemployment hit an all-time high as many struggled to find means to support their family. Mental health was a big topic of discussion as we learned to navigate life under confined parameters. This past year has taught us to take inventory of our lives and invest in yourself, your family and your future. Investing in yourself can come in forms of self-care, reading a new book, returning to school or focusing on your health both physical and mental. Financially, you could create an emergency fund or save for retirement. Since we are spending more time at home, invest in improving your space. The markets, just like life, will bring highs, lows, and everything in between but prioritizing yourself and your wellbeing, financial and otherwise, can help smooth out the ride.
With the news circuits returning to hot button financial topics like the future of inflation and market volatility, it is important to take a step back and reflect on what lessons have come from the last year and apply them to all facets of life, including investing. Embrace the good times, weather the bad knowing better days are on the horizon, and prioritize your own financial well-being.