“This Time Is Different”: How We Can Persevere
BY: BILL STORDAHL, CFP®
Have you been worried about the state of the world? You’re in good company. Many people have been concerned about current events and wonder if they will be OK. From divisive politics to inflation, it’s easy to understand the fear about what the future holds.
But take heart. It’s important to remember that this is not the first time we’ve faced challenges. Many difficult moments have left people feeling like “this time is different.” These moments, from the Great Depression to the Great Recession, all presented difficult times—but they were also times we got through.
This article explores how a historical outlook and a long-term financial plan can help build optimism even when times seem challenging.
A Look at History
Our prehistoric ancestors faced tough moments, but we don’t have to go back that far in history. American history of the past century provides several examples.
One of our most challenging moments was the Great Depression, a time of suffering for many. At its height, a quarter of America’s workforce was unemployed, gross domestic product (GDP) fell 30 percent, and many people woke up each morning wondering how they would feed their families. Yet, the country did recover.
The 9/11 attacks were another difficult moment in our recent history. The attacks scarred us, leaving fear and uncertainty in their wake. Yet they also brought the country together. We set aside our differences in unity and came through the trauma together.
The Great Recession of 2007-09 was another trying time. Unemployment reached 10 percent, homeowners across the country foreclosed, and the major stock indexes lost more than half their value. The economy was slow to recover but also entered its longest economic expansion in U.S. history.
The common thread in these examples is that we came out on the other side of difficult times. It’s true that “this time is different” in some ways, but the fundamental reality is that we have always been able to overcome challenges and rebuild. And while history does not guarantee the future, it can provide comfort that many times before, things were different, and many times before, people just like us persevered.
How a Financial Plan Can Help Alleviate Anxiety
It’s easy to feel anxious when seemingly every headline predicts a recession. Or a world leader makes threats. Or markets stumble, and portfolio values drop.
As fiduciary retirement planners, we help coach clients through concerns about how any event—or the total of them all—will affect them. It’s not just the dollars and cents. People want to know that they’re going to be OK.
Although we can’t predict what will happen, we can say that one of the best ways we’ve seen to alleviate financial anxiety is to have a long-term financial and investment plan. Having a plan can help provide a sense of stability, even in uncertain times.
When creating a long-term plan, it’s important to consider a range of factors, such as your income, expenses, investments, retirement horizon, and debt. You also want to consider your priorities, such as retirement, a child’s education, or buying a home. By taking the time to consider all these factors, you can start creating a plan that is tailored to you.
You may be unsure how to coordinate all your financial areas into a plan that helps provide a sense of stability and attain your goals. In that case, consider working with a financial advisor who offers comprehensive planning. We generally recommend a fiduciary, fee-only advisor so you can feel confident the advice you receive is intended for your best interest.
While it’s important to have a long-term plan in place, it’s also important to be flexible and adjust your plan as needed. The world is constantly changing, and so is your life. An adaptable plan can help you navigate these changes more easily.
A Sense of Perspective
It’s understandable to feel anxious in uncertain times. It’s understandable if you feel pessimistic. However, history shows us that we are resilient. We have the ability to overcome even the most difficult of challenges. So, consider adopting a historical perspective and long-term planning to help you move forward more confidently.
We offer a complimentary 15-minute call to discuss your financial situation and concerns and share how we may be able to help.
This commentary reflects the personal opinions, viewpoints and analyses of the Stordahl Capital Management, Inc. employees providing such comments, and should not be regarded as a description of advisory services provided by Stordahl Capital Management, Inc. or performance returns of any Stordahl Capital Management, Inc. Investments client. The views reflected in the commentary are subject to change at any time without notice. Nothing in this piece constitutes investment advice, performance data or any recommendation that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person. Any mention of a particular security and related performance data is not a recommendation to buy or sell that security. Accessing websites through links directs you away from our website. Stordahl Capital Management is not responsible for errors or omissions in the material on third party websites and does not necessarily approve of or endorse the information provided. Users who gain access to third party websites may be subject to the copyright and other restrictions on use imposed by those providers and assume responsibility and risk from the use of those websites. Please note that trading instructions through email, fax or voicemail will not be taken. Your identity and timely retrieval of instructions cannot be guaranteed. Stordahl Capital Management, Inc. manages its clients’ accounts using a variety of investment techniques and strategies, which are not necessarily discussed in the commentary. Investments in securities involve the risk of loss. Past performance is no guarantee of future results.