In the face of such news it’s incredibly difficult to remain optimistic about the future, and many investors are pulling out completely and waiting for the dust to settle before returning to the markets.  I can’t say I’m immune to the fear, though I can say I’ve not acted on it. This is in part because I have a financial advisor who I trust managing things for me – which certainly helps – but also as a result of some discussion and article sharing with my Dad which has taught me to be patient.

When I first met with my financial advisor several years ago, he explained to me the importance of investing long term.   He explained then that the market , while up at the time, would not remain so.   There would be periodic dips – recessions and in some rare instances depressions – that reflect a marked reduction in value of investment assets.  Overall, however, the market has continued to trend upwards and generate value.  The key to prosperity there is to stay the course through the down times and reap the rewards when the markets recover.   Hence – invest long term.   

Obviously I am leaving out some aspects of this – I am not a financial mastermind, I don’t have any degrees dealing with economics and certainly don’t have a wealth of experience to draw on.  I do have common sense, though.

It’s really difficult to look at an investments value and watch it decline day after day.   It’s difficult when you see half of your net worth disappear in the course of a month and you didn’t do anything to cause it and couldn’t do anything to prevent it.  It’s incredibly tempting to say “ENOUGH! PULL MY MONEY OUT NOW AND PROTECT IT!” which is something I’ve been incredibly tempted to say many times in the past few weeks. 

Common sense, however, has prevailed in my case.  I’ve declined to utter those words.  In fact, I am almost tempted to pump more money INTO my investments.  Sure they may decline in value some in the coming weeks (and by “may” I mean “WILL”), but they’ll recover and I’ll end up better off for it.

If we look at past evidence of how markets perform after turmoil such as what we’re experiencing now we see that not only do the markets recover,  in some cases they recover incredibly fast and generally lead to significant prosperity for those who stayed in the game.   

I’m certainly looking forward to the recovery of the markets – once investors and brokers realize it’s not the end of the world and start investing again – and the prosperity that will follow.  

Keep in mind, though, this is stuff I’m in no way, shape or form qualified to talk about – but I’m willing to bet that time will show that I was right.