Apologies for deviating from our standard programming again but I did want to do a another check-in type post as in case you’ve missed it; the market and overall economy still isn’t doing too great. Every morning I check the news (well CNBC), the headlines is “STOCK MARKET DOWN ____ POINTS” and the earnings reports that I follow all seem to be bad (Walmart, Target, Snap, Google, Amazon etc). Outside of that I feel like there’s general angst around ‘layoffs’ and ‘hiring freezes’. It’s pretty tough out there! Although I was surprised to see that the Dow is up 500 points from last Wednesday (article written Tuesday evening) and the Nasdaq (more tech stocks) are only down 150 points. So maybe it’s more noise than bad news that’s going on?

I’ve been trying over the years to be a bigger proponent of tuning out the noise and sticking to my fundamentals of saving and investing. I will say it’s been a lot harder over the past few weeks with all that are going on (or at least feels like it’s going on). All that to say; I’m only a little freaking out. Of course as I mentioned last time, I’m not an economist, certified financial planner and I don’t have a crystal ball and maybe this article is more to reassure myself but here’s why I’m not freaking out with all that’s going on in the financial world.

We’ll bounce back (because we always have)

History always repeats itself and time and time again we’ve always bounced back from a recession/depression. It may have taken a few years but the US (and global) economy always comes back. I believe the market will come back even from this little rut it finds itself in. Think back to 2008 or even more recently, March of 2020. I remember watching my investment plummet 30% in value. It didn’t feel great! However I didn’t panic sell, or really sell at all for that matter and within a few months things were back! I imagine it might not be as fast of a rebound as it was in 2020 but you never know!

Unless you’re retiring tomorrow (which if you are congrats!), you’re not in need of your investment money anytime soon. It’s important to keep your investment money and your spending money separate. I keep a budget whereby I bring in enough to pay the bills each month. I then think of my investing in terms of short-term, medium-term and long-term investments. My short-term investments I mostly keep in high-yield savings accounts (i.e. risk free). My medium and long-term investments I don’t need in the short-term so I’m ok if their value fluctuates. The stock market has returned on average 8% but there are some better years (like we saw in 2021) and some not so good years (like we’re seeing in 2022).

With that in mind, I’ve actually not sold any stocks so far. I pick good investments that I believe in long-term and I stick with them!

I’ve got a good job and there are more out there if needed

I really hope this doesn’t come across as boastful and do want to call out that there are plenty of people unemployed or underemployed right now. However it’s also important to express gratitude and in my own life I’m thankful for a job. I work at a large Fortune 500 company, one that I don’t worry about going out of business anytime soon. However as secure as I feel layoffs happen even at big companies. I’m thankful for my company being open and honest and trying to be financially sound in their decision-making.

Outside of that, I’m still getting hit up by recruiters, I’m still hearing of friends leaving for other companies and I’m still seeing plenty of “Help Wanted” signs both online and in the real world. Because of that, I’m not going to freak out as I feel ok about where I am now and also feel ok about my prospects if an unfortunate layoff situation occurred.

I’ve got an emergency fund

I never really appreciated having an emergency fund until March of 2020 right when COVID was hitting and the economy was panicking. I’d always heard how having 3-6 months of expenses stocked away in cash would help you sleep better at night but never appreciated that until a time of crisis like that. I’d always been good about keeping and emergency fund stocked, not pulling it out in case of an emergency (which I’ve had once or twice mostly when buying houses and needing cash to close temporarily) and even keeping it in cash. There were times during 2021 when the stock market was booming and every stock was basically returning 20% year over year while my emergency fund in cash was returning 0.4% that I considered buying a lower risk index fund and setting a limit order (which would auto sell at a limit I set) but I never made that happen and kept it all in cash. I’m kind of low key thankful for that!

Look money won’t save you and there could always be something catastrophic but having that cushion set aside of 3-6 months of expenses certainly makes times like these feel more manageable!

I’ve been focusing on hard assets

If you read my post on reviewing The Bitcoin Standard you’ll know that bitcoin is referred to as ‘hard money’ but don’t worry I’m not only talking about bitcoin here! (For what it’s worth I only have a few hundred in it and geeze have I lost money in bitcoin!). Instead I’m talking about real estate. I’ve spoken over the years about Why I’m Doubling Down On Real Estate and although considered switching that up Mrs. Money and I stuck to our plan. Of course it’s easy to say now as stocks are crashing but there’s just something about investing in something that you control, you can touch, you can work on. A rental house won’t arbitrarily decrease in value because they said the words “supply chain issues” in the earnings report or tweeted something absurd.

Of course rental and home values rise and fall like other assets but I’m hoping for less volatility! People also need a place to live in good times and in bad times and I’m hoping that by being a good landlord and providing a safe and comfortable place to live for a tenant that they will provide me a small return on my investment!

Funny enough, we closed on our rental house in early May, literally the first day (it felt like) that the market fell 1,000 points. I remember signing those papers being like geeze a) hope this is smart and b) at least this money isn’t in the stock market right now! No one has a crystal ball but I’m hoping that a hard asset like a house will prove a slow and steady growth engine!

Summary

There’s a lot to be worried about but then again, when isn’t there? Despite more and more economic uncertainty, I’m not personally freaking out! I’m taking comfort in what we have, the safety net we have in store and the diverse income streams we have in place. Good times don’t last forever but then again neither do bad times!