This week, I’m talking about how to keep calm in a bear market.

Today, I’m talking about a plan of action for when you’re feeling panicked. Back in 2008, when I was still cutting my teeth as a new advisor, I remember well those panicked days when the Dow would drop big or some new devastating news would come across the headlines. Being inexperienced, I was often shell-shocked during this time and didn’t quite know how to keep clients from panic-selling, since this was new territory for me as well. 

But one day, I was talking to one of my clients who badly wanted out and wanted to sell. Like today, the stock market had already dropped significantly, and the last thing they should have done at that moment was sell into the teeth of the death spiral that was the stock market in 2008. 

After running out of reasons of why they should sell, it dawned on me. I said “look, I don’t want to sell today. It’s a mistake. Why don’t we do this. If you still want to sell just as badly a week from today as you do today, call me, and we’ll talk again. I won’t argue with you if you decide a week from today that you still want to sell”. 

The client didn’t call back a week later. Concerned over how they were doing I called back a couple weeks later, and even though there was still blood in the streets, they had come to their senses and no longer wanted to abandon their long-term strategy. 

I thought, hmmm...maybe I’ve stumbled onto something here. It was my last resort with clients who were panicky, and as a result I only had a handful of clients who liquidated in the teeth of the 2008 recession. Almost all of my clients stayed the course, stuck to their long-term investment strategy and were happy that they did. 

So “wait-a-week” is a plan that I’ve used since, even though I stumbled upon it on accident. A week of contemplation before taking action allows some time to think rationally and weigh the risks and consequences of your decision, and so if you’re thinking of making a rash decision, I would encourage you to practice patience and wait before acting. 

That’s it for today. Thanks for listening. My name is Ashley Micciche and this is the One Minute Retirement Tip. 

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