• Bob Brooks

Should You Look at Your Statements or Ignore Them?

During the financial crisis, the experts consistently gave out this advice. They would say, "don't pay attention to the news. It is all noise. Most importantly, don't look at your statements. Ignore them until all of this blows over." Today, you hear the same advice. In fact, on CNBC just yesterday, they were discussing the same information. Although I get what they are trying to say, I think the message is the wrong message. What they are trying to say is don't look because you are in danger of creating an emotion that might create emotional decision making. Rule #1 - you don't want to make decisions through the lens of emotion. There is a high probability you will regret it. So, if it is going to increase fears and create emotion, why not ignore it? What are you trying to accomplish by looking at your statement? It is all about risk. As an investor, you need to be able to answer the following questions. How much risk are you taking? Are you comfortable with this risk level? These are essential questions to ask and answer. It might be that you are not comfortable with the risk you are taking. Regardless of whether or not this bear market is about to recover and rebound or we are in the early stages of a bear market, you will face downturns and significant scary declines again sometime in the future. My concern is that investors have been unaware of the risk that they have taken since 2009 because when the market is going up, it doesn't matter. So, the first question is, how much risk are you taking, and are you comfortable with it? The second question is even more critical. Are you comfortable with how you are accepting that risk? Said another way, are you comfortable with the strategy? Most investors are in this situation. They are experiencing significant losses. There is no one willing to help guide them. If they have an adviser, they are being told to ride it out because you are a "long-term" investor. They feel stuck as their emotions rise and fall with the day to day historical moves of this bear market. In this case, you need to fix the strategy, not the risk level. You need a plan B (when the market goes down) versus staying in Plan A (when the market goes up) while in a Plan B world. There are plan B strategies available for investors with IRA's, and no, you don't have to be a wealthy investor to access it. I have created a plan B strategy, and this is how I manage money for my clients. If you are interested in talking further, please send me an email at If you are wondering what to do about your 401 K plan at your current employer, I have a few resources for you. First, we have a recording of the webinar that I held last week - The Coronavirus and your Retirement Money can be watched by clicking here. I go over everything that you need to know. Second, I am in the process of loading up to our YouTube site 50 plus educational videos shot in a studio. There is one that is specific to plan B investing in your 401 K plan. These videos are 20 to 30 minutes apiece and designed to teach those who are ready to learn. That should be up by the end of the week. Bottom line - be comfortable with the risk you are taking and how you are taking it!