The election season in the US has come to an end. Whether you are happy with the result or not, you are likely to see volatility in the market around the world as investors process the news.
The market prices from one second to the next reflect our collective sentiment. We don’t yet know how the new policies from the new administration will truly swing global economy. All we know is right now we feel uncertain. Our guesses show up in the trades.
We’ve seen this quite a lot. Most recently right after Brexit happened. The market may dip then rebound, or rally then taper off. And just when we think we know how the world economy and politics are going to play out, another surprising news will hit us.
In the end, we need to recognize that we don’t know what will happen in the future. Even if we think certain things are unavoidable, we don’t really know when they may come to past.
In a time of uncertainty like this, which is really every moment of your life, the best thing you can do is to focus on the long-term – on what matter to you, and on what you can control.
What Matter to You
If a doctor told you that you only have one month to live, what are the things you’d like to do? Is it reuniting with your family? Talking to your old friends one last time? Going on a trip to the Arctic? Making sure your children are taking care of? Telling someone you love her?
Whatever your answers are, those are what matter to you. Do those things now, or make a concrete plan to achieve them. Focus your resources on what actually matter to you.
Or maybe what matter to you is something greater. For Astronaut and NASA scientist Piers Sellers, it’s finding a solution to slow global warming for the future generations, even after he was diagnosed with stage IV pancreatic cancer.
What are some of the long-term trends that this world is heading into that matter to you? Maybe it’s income inequality, or it could be the increase of epidemic. For some is climate change; for others is the increase of hate and violence in our society. Whatever it may be, invest your time, energy and money on what you value. While I still believe in maintaining a core portfolio of passive index funds for your long-term financial security, it is possible to invest in what matter to you within your ability. You just need to identify what matter to you.
What you can control
You cannot control the market, but you can control most other aspects of your financial life. The way to gain control is to have the knowledge. Do you know how much you are spending, saving, paying down debt, or investing? If not, now it’s the time to find out.
More importantly, do you know how much you are spending, saving, paying down debt, or investing on what matter to you? If not, revisit your budget and see if you are putting your resources on where your heart is.
In addition to disbursing your resources according to your values, you can also increase your income security by growing your human capital. You cannot control your job security, but you can invest in yourself and make yourself more valuable. Focus on the things that cannot be taken from you – your knowledge, experience, and legacy.
There will always be emotional and surprising events in the future that send markets to a roller coaster, but you will know what is important to you and what is within your control. Focus on those, and the sun will still rise tomorrow.