Message from the CEO - Managing Fear

Hello FinGym Family!

For full disclosure, I had an entirely different email written to go out today speaking to the reality show we produced - Financially Naked, which is premiering tonight and will be launched on YouTube starting tomorrow. It’s a passion project of mine and the team’s that we’ve spent months working on; but due to yesterday’s market halt and ongoing fears about COVID-19, I feel compelled to send an entirely new message.

Watching the markets yesterday, watching people fight over toilet paper and and watching events like SXSW get cancelled (it was going to be The Financial Gym’s first time attending as an exhibitor); I am constantly reminded of the words delivered by Franklin Delano Roosevelt during his 1933 Inaugural address, “The only thing we have to fear is fear itself.” These words still ring true today except that we’re in a much better place than we were in 1933 when the nation was at the peak of the Great Depression and unemployment was 25%. 

What’s happening now is a fear of the unknown and that’s the worst case for financial markets; but it’s important to remember that fear and greed are the two biggest drivers of financial markets, and at some point greed will return and your investment accounts will look better. Until then, it’s important to remember that what you’re looking at are unrealized losses that only become realities when you sell into the fear. 

In 2009, the stock market had dropped in half from the previous year, and while it didn’t recover overnight, it recovered in four years. Investors who sold at the lows, unless they perfectly timed going back in, never recovered from the actual losses that they took. Highly volatile market situations, like we’re in now, are the worst times to make portfolio decisions.  

How am I managing through this? 

As a Financial Planner

I’m reminding my clients that this is why we have a plan. Every Financial Gym client has a financial plan with a roadmap for the next 5+ years. Market disruptions are normal and understanding why you’re invested and investing based on the timing of your goals is critical in times like these. Even if you’re going to retire in the next 1-2 years, you won’t need your entire investment portfolio to live off of right away. You’ll likely live off of that portfolio for over 20 years, so even your near-term retirement accounts are long term goals. 

I remind my clients of their plans, discuss investing extra cash they have if it makes sense or refinancing loans in light of potential further rate cuts. If you don’t have a plan, it’s one of the best investments you can give yourself. Knowing where you’re going with your finances, takes the stress out of turbulent times like these. 

As a Mom / Human Being 

I’m staying educated on the facts. My father, who is a pediatric surgeon, is sending me regular updates from the medical field and giving me perspective. I’m staying and encouraging my son to stay hyper vigilant about hand washing and taking care of our physical health. With over 5,000 viruses out there, we should all be this hyper vigilant during cold and flu season and the best way to ward off any potential virus should you contract it is with a healthy body. 

I’m continuing to travel. I’m continuing to eat out and support local businesses. I’m continuing to go on with my life everyday, because I refuse to live in fear. I’m not planning a cruise in the near future, but I am considering investing in cruise company stocks. There is a high probability that many of us will contract the virus and there is also a high probability that we will live through it. And I’m hoping that through all of this, we’ll have many lessons learned for future global challenges. 

As a CEO / Boss

I’m sharing information with my team and encouraging them to take care of their physical and mental health during this time. If any of them need to take sick days, they will not count toward their annual sick day allowances. Thankfully, we can work virtually with our clients if we get to the point of mass quarantining, but until then, I leave it up to them to make the best decisions for their physical and mental health.

I am monitoring our business activity. I’m reading about startups that are planning layoffs and changing plans because of lowering sales and while our business is continuing to do well, I’m cautiously optimistic that we won’t have to make those tough decisions. I honestly feel like now, when everything is highly tumultuous, that people need financial planning and guidance more than anything. 

I know my team is fielding hundreds of emails and calls from clients and alleviating client’s worries by reminding them of the plans they have in place. I wouldn’t want anyone to stress about the future alone; and if you’re stressing, please give us a call and see if we can help. I don’t enjoy personally or professionally going through times like these, but in my 41 years of life, I know that they don’t last forever and planning and keeping perspective are your best keys for success. 

Warmest regards, 

Shannon McLay 

Founder and CEO

The Financial Gym