It isn’t easy seeing month after month of negative stock market returns, or
year after year. The news outlets don’t help either as they amp up all the negativity
to keep their audience at the tip of their fingers. So let’s look at the FACTS:
Every 3 years there is a 20% stock market correction or pullback. Every 2 years
there is a 15% stock market correction or pullback. Every 1 year there is a
10% stock market correction or pullback. Every 3-4 months there is a 5% stock
market correction or pullback.
The financial industry has it wrong, it’s not risk tolerance we should be
measuring, it’s your stress tolerance. The issue buried below risk is how much
stress the taken risk adds to your life. Instead of measuring risk, we should be
measuring stress, especially since it is stress that leads to health issues, sleep
issues, and mental health. The risk triggers the stress, and everyone handles this
added stress differently.
There are the major stressors in life such as having a heart attack, losing your
job, divorce.
Then there are the everyday triggers like traffic, your kids acting out, or
your spouse forgetting to empty the dishwasher.
How you handle stress will dictate your financial decisions. At the Women’s
Wealth Boutique, we strive to help you manage your stress so you can make
clear headed financial decisions that strategically position you for the long run!
Managing stress is like building a new muscle, you start small with the amount
of risk you take on and then build your muscle strength from there. What helps
to strengthen this muscle so you can take on more risk?
-Education! Educating yourself on how risk affects your wealth will lead
to massive jumps in your money game.
-Adding risk in all areas of your life. Speaking up at work, asking for what you
need out of a relationship!
-Monitoring your risk! Seeing how the risk is helping or hurting your money on a
regular basis.
-Adding protection measures to your risk. Attorneys, insurance, contracts, all
ways to protect as your build your wealth!
Our goal is to separate the risk and the emotion so the emotion is no
longer dictating the risk.
Now we can better understand the flow of the markets, we can better
strategize how to invest your money.
SOURCE: https://intelligent.schwab.com/article/stock-market-corrections-notuncommon
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