This Week’s Blogger: Scott D. Heins, CFP®, IAG Chief Investment Officer
Sirens are often associated with unfortunate events in life.
Sirens respond to car crashes. Sirens respond to medical emergencies. Sirens respond to house fires.
But how do you respond to sirens?
If you are driving, hopefully you safely pull over and allow emergency vehicles to pass.
Perhaps sirens stir your curiosity or concern. You wonder where they are going. You wonder who they are helping. Maybe you say a brief prayer for those for whom the sirens have been summoned.
If you listen closely enough, you can hear the sound of the Sirens growing in the financial markets right now.
There has been a crash. Investors have witnessed their account values decline and they feel injured. The Sirens are relentlessly bombarding investors with uncertainty and hopelessness. The Sirens are calling for investors to immediately sell everything and head for shore until the storm subsides. The Sirens are attempting to lure you into self-destructive short-term decisions for other peoples’ long-term profit.
How will you respond to these market Sirens?
Some will undoubtedly surrender their long-term assets for short-term relief from the Sirens’ song. It is understandable given the power of the Sirens’ songs, but it is still sad when good people are victimized by evil.
If you prefer to survive the Sirens unscathed, Greek mythology provides us with two different strategies for foiling their destructive plan.
Odysseus hatched a plan to hear the Sirens without acting on their irresistible allure. He had his men tie him to the ship’s mast, instructed them to completely ignore him regardless of his pleas, and then plugged their ears with wax so they could not hear the Sirens (or him). He made it safely through.
Jason took a different approach. He and his Argonauts sailed safely past the Sirens by using a tremendous musician, Orpheus, to drown out the Sirens’ song.
The longer this temporary market correction drags on, the louder and more alluring the Sirens will get. Undoubtedly, this is one of many danger points on your journey. This is where your strength and resolve is challenged and your financial plan’s long-term success can be helped or significantly harmed.
When you hear the Sirens calling to you with alluring songs of hopelessness and despair, take action:
- Pull over and let them pass
- Say a prayer for wisdom and patience
- Plug your ears with wax (and turn off the financial “news”)
- Drown out the Sirens’ song of despair with your own positive messages (“my plan is on track”, Tax Reduction Trading, or Market Math)
Whatever you do, do not fall victim to the Sirens’ songs.
Securities offered through LPL Financial. Member FINRA/SIPC. Investment advice offered through IAG Wealth Partners, LLC, (IAG) a registered investment advisor and separate entity from LPL Financial.
Any opinions are those of IAG and not necessarily those of LPL Financial. Expressions of opinion are as of this date and are subject to change without notice. This information is not intended as a solicitation or an offer to buy or sell any security referred to herein. No strategy assures success or protects against loss. Investing involves risk including loss of principal.
Quote of the week:
Mannie Friedman: “When the market wants to bet that the world is coming to an end, the safe bet is to take the other side and bet the world won’t come to an end. After all, what have you got to lose?”
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