Learn why inner peace is the key to investing, according to Keith Akre from Stillman Bank.
“Remember, Dragon Warrior, anything is possible with Inner Peace.” – Master Shifu,“Kung Fu Panda 2”
The pickup in market volatility this season has caused anxiety for many investors. People look at the balances on their investment accounts, see fluctuations from day to day and start wondering, “Should I sell? Is this a good time to buy? What if the market goes down even farther?” This anxiety and second-guessing can be disastrous for your mental health and your bottom line. The best way to combat it is not through mastering the market; the market cannot be mastered. You need to master yourself and find your own inner peace.
I know what many of you are thinking right now: “Are you trying to give investment advice by quoting some goofy mantras from an animated movie?”
Yes, I am – and here’s why. The most common investment goal for investors is funding a comfortable retirement. The biggest risk to achieving that goal is not the movement of the market – it’s in deviating from a good plan. Anxiety leads to panic selling after the market goes down (“I can’t lose any more money!”) and panic buying when the market goes up (“I can’t miss out on any more of these gains!”). Getting whipsawed by the market because of this emotional decision-making will devastate a portfolio’s chances of achieving its goals.
“Once I realized the problem was not with you, but within me, I found inner peace and was able to harness the flow of the universe.” – Master Shifu,“Kung Fu Panda 2”
So, how does someone find their inner peace as an investor? How do you successfully battle the demons of anxiety and self-doubt?
Have a Good Plan and Have Faith in It
Speak to a qualified financial professional and have them create a financial plan. Make sure this is someone qualified whom you feel you can trust, because you need to have faith. The over-quoted line from Mike Tyson is apt here: “Everyone has a plan until they get punched in the face.” A financial plan is no good if you cannot adhere to it when the market starts throwing haymakers at you.
Get Back to the Basics
You will be better able to be at peace with your investments if you have all of your basics down first. Spend less than you make. Have an emergency fund of cash on hand. Make sure you’re properly insured. This will make you less likely to have to tap into investments if the going gets tough, and it’ll keep you on plan.
Control What You Can
You cannot change the saving and investment decisions of the past. You cannot control what the market will do going forward. You can only control your habits and responses right now. Remember the words of Master Oogway: “Yesterday is history, tomorrow is a mystery, and today is a gift… That’s why they call it the present.” Use this gift wisely.
The bottom line is that fear and anxiety do more to derail financial goals than market volatility does. You cannot control the market, and you need to be at peace with that. Have a plan, stick with it, and know that the things you can control – like how much you spend and how large your emergency fund is.
This will put you on a solid financial footing that will help you weather the tough times.
Find your inner peace, and you will find that your portfolio will harness the flow of the market to your ultimate benefit.