Reader Q&A: . I’m Worried About My Investments And Not Sure What I Should Be Doing Right Now. Any Advice?
Danielle, age 39 asks...
Facing a financial dilemma? We are here to help.
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Today's question is from "Danielle age 39”:
I’ve been really stressed watching the news about tariffs, inflation, and the stock market dropping. I’m worried about my investments and not sure what I should be doing right now. Any advice?
Feeling stressed right now is something that many people are experiencing.
Right now, it might feel like your entire house is on fire and you’ve only got one bucket of water. However, feelings can make us think that things are worse than they are.
What to do now
Let’s look at how you can stay calm and confident during these challenging times.
1. Don’t panic – stay invested
Right now, everyone is feeling on edge with tariff negotiations, market slowdowns, and overpriced groceries. And while the feeling of uncertainty is hard to bear, reacting quickly won’t ease your discomfort.
Take a moment to remind yourself of some key facts that have helped many investors get through uncertain times:
The market has always had its ups and downs.
If you sell too fast, you could lose out on future gains or prevent your investment from recovering.
Most of the time, reacting based on emotions never turns out well.
Remember, hard times don’t last forever. You wouldn’t be where you are now if you hadn’t learned to weather the storm.
You can even create a mantra or repeat an affirmation that you can say to yourself when you start to feel nervous.
2. Revisit your budget
The hard pill to swallow is that we have very little control over what is happening in the economy. However, what we do have control over is how we manage our money.
Now is a great time to review your budget. Take a look at your income and expenses with the perspective of how you can support yourself in the future. What money moves can you make now that will make life easier down the road?
Start by reviewing your income. Understand how much money you have coming in consistently. Additionally, are there any income opportunities? Do you have the time and energy to put in more hours? Could you start conversations about a raise?
Next, list out all your expenses. Then highlight your necessary expenses. These are the items that you need to survive, such as housing, medication costs, transportation, food, childcare, insurance, debt payments, etc. Calculate your total necessary expenses compared to your income.
From here, start looking at which expenses you can cut or scale back on:
What expenses can I temporarily cut back on to free up some extra money?
Which expenses can I reduce, such as switching to a lower-cost phone plan or using coupons when grocery shopping?
Can you turn my daily coffee run into a weekly coffee run?
Reviewing your expenses can remind you that you ultimately have control of your money. This isn’t an exercise to deprive you of things you enjoy buying. Instead, it’s about helping out your future self.
3. Build your cash cushion
So, now that you know how you can free up some cash, let’s talk about putting that money to work by strengthening your emergency fund. If you’re relying on some of your investments for income, having emergency cash can help you if one of your investments slows down.
Ideally, your emergency fund should cover at least three to six months' worth of essential expenses—think rent or mortgage, groceries, insurance, transportation, and any minimum debt payments.
If that goal feels overwhelming, don’t worry. Start small. Even setting aside $500 to $1,000 can give you some breathing room and prevent you from having to dip into your investments the next time a surprise expense pops up. Building your emergency fund can prevent you from selling investments during a market dip, which could lock in losses.
4. Set goals for yourself
If you find yourself focusing too much on the state of the economy, try shifting your focus by creating goals. Having financial goals is a great way to make sure you’re financially secure during tough times.
Here are some financial goals you can use to get started:
Start an emergency savings goal of $3,000.
Start a side hustle.
Eliminate 50% of your debt by the end of the year.
With my financial goals, I like to set one big financial goal to achieve in six months to a year. I then break down that goal into smaller goals, so I have something to consistently focus on. Then, every month or every few weeks, I celebrate small successes.
With a financial goal, you can have better control of your money and focus on what matters.
What to do about your investments
Here’s what a lot of people feel uncertain about. Do you sell? Do you invest? We’ve got some things for you to consider.
1. Diversify your investments
A diversified portfolio can help you with risks and any potential setbacks. Having diversification in your portfolio means investing across multiple assets and not putting all of your money in just one investment. Often, a diversified portfolio has a mixture of stocks, bonds, index funds, and even international investments.
Here are some ways you can diversify:
Diversify across asset classes: Spread your investments across things like stocks, bonds, real estate funds, etc. These asset classes react differently to market conditions (e.g., stocks thrive in growth periods, bonds offer stability in downturns).
Consider geographic diversification: Hold both domestic and international assets. Example: Mix U.S., European, and Asian investments.
Balance your risk profile: Combine low-risk assets (like bonds) with higher-risk ones (like growth stocks). Tailor your mix based on your goals and risk tolerance. (Seek professional guidance if you need help).
Consider investing in both tangible and intangible assets over time: Tangible assets e.g. real estate, can provide intrinsic value and stability. Intangible assets .e.g. stocks, can offer liquidity and scalability. Explore each category and only invest according to your comfort level. Keep in mind that no investment returns are guaranteed.
2. Keep investing if you can
If you can endure some risk, now is a good time to invest more. Buying now when prices are low may not give you an immediate return on your investment. But remember, investing is a long-term game. Planting the seeds now, aka investing now, can offer a fruitful return when the market starts to improve.
Likewise, investing in stocks such as consumer staples (groceries, household goods) and utility stocks (energy) can offer better protection for your investments. These stocks tend to be more stable no matter the economic forecast.
3. Limit media consumption
You may be feeling like you need to be paying attention to the news to be informed. Yet, every time you scan a headline, your heart starts pounding out of your chest. Before you know it, you’re doomscrolling with sweaty palms and bloodshot eyes.
Constant exposure to fear-driven news can create unnecessary anxiety, cloud your judgment, and even push you to make hasty decisions like pulling out of your investments too soon or hoarding cash out of panic.
To avoid panicking and eating ice cream in bed because you just can’t deal with the world, try setting these boundaries:
Filter your social media feed to lighter, politically neutral posts.
Choose reliable sources to consume the news from.
Remember to read past the headlines.
Consume news when you are calm.
Remember: short-term news cycles will come and go. What matters most is that you stay grounded, stick to your plan, and make decisions based on long-term thinking, not fear.
4. Talk to a financial advisor or planner
Although our girlfriends give great advice, when it comes to your portfolio, sometimes it’s best to talk to a professional. A financial advisor or financial planner can help you assess your risk tolerance and make thoughtful adjustments.
Whether it’s figuring out if you should rebalance your investments, increase your cash reserves, or stay the course, a professional can offer a perspective rooted in experience and data.
When looking for a financial advisor, start by asking for referrals from friends and family. You can also check in with your financial institution. Don’t forget to check online reviews for any professionals you’re interested in working with. The CFP board is also a great place to start your search.
5. Educate yourself
Another thing that can contribute to our anxiety and stress is misinformation or not enough information. Many times, what’s reported in the news doesn’t share the entire picture of what's happening. You might hear that one stock is plummeting, but perhaps other stocks are doing well. Remember, negative news always gets more attention than positive news.
Additionally, many articles and reporters might throw around big finance terms or use jargon that can make us feel more confused.
Learning about how investing works, the history of the stock market, and other aspects of financial literacy can help you feel more in control. It’s like going to the doctor and them saying you have “exploding head syndrome.” That sounds intense because you don’t know what it is.
Fortunately, it’s just a condition when someone hears a loud noise or explosive sound in their head, and there is no actual pain involved.
As you can see, knowledge can ease stress.
6. Take care of your mental health
Pay attention to the narratives in your head. What are you telling yourself? Are you imagining the fall of society? Or are you trying to solve real problems?
Now more than ever, we have to prioritize our mental health. This could mean taking a day where you don’t watch the news. It could mean spending a day in nature or speaking to a therapist.
Most importantly, taking care of yourself right now can mean not being so hard on ourselves. When planning for a better financial future, you are bound to make mistakes. You might lose money. But if your mental health isn’t intact, no amount of money can fix that.
Take time for yourself. Spend time with loved ones. Because in the end, it’s the little things that matter.
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No one knows the exact future of the stock market. Stocks can shoot up tomorrow, or they can dramatically fall. Whatever the future brings, we’ll be here to support you on your financial journey.
Remember, you can also speak with one of our financial coaches to get help with your unique financial situation.
