“A smooth sea never made a skilled sailor.” – Franklin D. Roosevelt
I know the coronavirus pandemic has been unsettling and extremely hard on all of us. Please be sure to take care of your physical and mental health during this very trying period.
Not only is the world changing before us, but the stock market has been extremely turbulent as well.
And it’s during times like these that I find it tremendously helpful to expand our perspective.
Below is our old friend, a performance chart of the Dow Jones, a common benchmark for the US stock market, since 1900. While market turbulence seems very unsettling up close, it doesn’t look nearly as scary when you can zoom out a bit and take the long term view.
So what can investing in the stock market teach us about our own lives? There are 3 key parallels I have found between the two.
1. Perceiving life through a longer-term perspective will make the day-to-day events seem less important. Even the most violent storms don’t last forever
Doesn’t looking at this chart help you relax a little bit? Even with all the bumps in the road, there is an undeniable and overwhelmingly upward trajectory.
Imagine what life was like during each of the drops on the market’s climb upward.
All the fear, all the breaking news stories, all the uncertainty.
And that little dip at the very top? That was due to the coronavirus pandemic.
We don’t know how long this pandemic will last. It could even get worse before it gets better. But whenever this current storm passes, we will be able to look back at it with perspective. “Woah, 2020, that was such a difficult time, incredibly challenging, even life changing, I didn’t know if I could make it.”
But like all storms before it, this one will also pass.
What if we could adopt this perspective right now? Just like market drops, we can know this very challenging time won’t last forever and things will get better. Spring always follows winter.
2. When life hits you hard, there is often treasure to be found
As long-term investors, what happens to us when the market goes down? Do we panic? Do we listen to the fear all around us? Do we obsess over the news and what the market is doing on a daily or weekly basis? Do we sell? Do we get out for a while and jump back in later?
If you are a reader of this blog, you know the answer is “hell no.”
You know that market drops (even the big ones) are a great opportunity to continue investing, because you get to buy more shares with the same amount of money. You know that the stock market has gone on sale.
Similarly, when life becomes very challenging, if you don’t allow yourself to get completely swallowed up by it, there are often valuable lessons to be learned to help you grow and evolve.
For example, I am currently going through the darkest emotional period of my life. There are many days where I feel hopeless and have such little energy that even thinking about my future sends me into an emotional tailspin that can take days to recover from. It feels like it will be this way forever.
But whenever I have the ability to look at my life in a more objective way, I can see that I am learning how to cope with overwhelming emotions and I am getting chances to practice every single day.
I am learning how to put my ego aside and lean on others for emotional support and guidance. I am beginning to understand that I don’t have to believe my negative thoughts because most are very predictable and have no basis in reality whatsoever. I was adamantly against antidepressants for many years, but I am taking them now, which is softening my rigid, black-and-white belief system of how things need to be.
And when I get through this storm, I will be much more appreciative of more consistent emotional balance.
What are some of the lessons you have learned through your darkest times that are helping you live a better life today?
3. Taking action to improve your life is always better than sitting on the sidelines
Imagine the year is 1931. Nearly 2 years after the market crash of 1929. You have lost a substantial portion of your wealth in the stock market. This storm feels like it is the end of the world and just won’t stop. There is fear everywhere around you.
You decide to pull all of your money from the stock market and vow to never take a risk with it again. You put everything under your mattress and live the rest of your life knowing that your money is “safe” with you always. Your friends and family applaud you for doing the responsible thing.
While this course of action is understandable given the circumstances and you had really good excuses to do this, take a look at all the financial growth you missed out on over your lifetime.
How does this relate to life?
When we choose to play it safe in our lives and allow fear of the unknown to keep us stuck, we do not give ourselves the opportunity to let life expand us. When we stay at a job we hate because it pays the bills, when we stay in a relationship that we know deep down isn’t good for us, when we don’t take chances in life because it’s safer not to, we miss out on the tremendous growth opportunity that awaits us when we jump in.
Of course, taking chances in the name of growth may create more turbulence and unknowns than keeping it safe, but let’s take a look at the chart again.
You see that big gap between the end of the red line and the end of the black line? That’s called regret.
What are you giving up by staying where you are?
Whether it’s traveling, investing in yourself by hiring a coach for support, having a difficult but honest conversation with a loved one, downloading a meditation app, learning a new skill, going on a date, starting a blog or business, or moving to a place you really want to live.
I don’t care how young or old you think you are. Where can you practice jumping into a more authentic life and trust the natural flow upward?
Feel free to start small. Because just like the stock market, even relatively little investments can grow tremendously over time.
Trust that life supports you. The market goes up in the long run
Imagine what would happen if you not only put your money to work in this way, but also your life.
When you invest consistently over the long-term, your money works for you in the background, even while you sleep.
When you take brave steps forward, life works for you in the background, even while you sleep.
So even though storms happen, let’s begin to trust the flow of the stock market and life, and enjoy the ride upward.
There is only growth from here.
The Personal Finance Playbook 
Great outlook