By Lisa Linfield

I recently wrote an article on my blog about why the markets had crashed, and emergency market currencies had been hit so hard.

Yes, Coronavirus is an issue.  But so was Trump’s tax incentives, an overpriced US stockmarket, Brexit and a war for oil dominance between the Saudi’s, Russia and the US.

All that meant the last two months have been a sea of red on global markets, a retreat to the Dollar, and Emerging Market currencies looking rather challenged (to put it mildly).

Add to that we now have South Africa being downgraded, prolonged lock downs killing global economies, and drastically rising unemployment… and things are looking rather challenged.

So the biggest question is what should you be doing?

Your investments that are already in the stock market

My little girls watch a spin off of the Lion King when the Zebra’s famous saying is “Panic and Run, Panic and Run”.  However, when it comes to the stock market, that is by far the worst action to take.

The biggest reason why most people never make the growth returns they need to make over the period of their investments is that they sell low and buy high.  They ‘panic and run’ in the midst of this type of market when it drops really low.  The reality is you make (or lose) your money on only two days – the day you buy and the day you sell.  Between that (like now), there are times when you have what’s known as ‘paper losses’, where although the value has gone down ‘on paper’… until you actually sell, that loss can just as easily turn around in a few months and become a gain when the markets grow again.  But if you’d sold, and put it into cash, you’ve locked in that loss and have no chance of getting your money back.

A study by JP Morgan over 20 years of stock market data showed that if you took your money out the market and happened to miss the 10 best days out of 7,300 days, you would make just less than half the amount of money you would have made if you’d just left your money invested.  If you missed the 20 best days (out of 7,300), you would have ended up losing money over that 20 year period.  The moral of the story being, you need to stick to your investment plan.  If you had sold out on Thursday after the US markets dropped so radically… you would have missed out on the 9.3% jump that happened one Friday in the last month in the US markets.

The biggest suggestion I can make is if you’re feeling panicked, speak to your financial adviser.

If your income has suddenly dried up

This week, my podcast episode was on what to do if your income has suddenly dried up. I’ll summarise that here.

I know that for many of my Working Women’s Wealth tribe, and my clients in my wealth management business, these last few weeks have been a whirlwind.  Small businesses are asking staff to take between 20-50% pay cuts, and contract workers and small businesses have had their income suddenly dry up.

The very first thing I would suggest, is make sure you are well supported – by your friends, by your work colleagues, by your family, or by online communities that are available.  It’s important to find people who can help you brainstorm a way forward.

Then, make sure you take these next steps

  1. Get the family on board to cut your expenses – you can’t fight this alone.  When I did this a few years ago when I left corporate to start a business, one of the amazing up-sides were that my children became far more financially aware and grateful.
  2. Renegotiate your debit orders – last week I had my FT.Com subscription reduced by a third – just because I asked!  Whether it’s your car insurance, your data at home, or a cell phone contract… look at how you can cut.  The quicker you cut expenses, the longer you will be able to last through this.  Cut deep, quickly – if it’s not essential, cut that expense.
  3. Get onto Plan B as soon as possible – whatever you can do to earn extra income, get that going as quickly as possible… while you look for another dream job.  The less you have to dip into your savings the better.  And never underestimate the life lesson you teach your children by showing them that when everything goes pear shaped, you keep making a plan.

Keeping sane in these crazy times

Between my husband and school’s closing, we are now in our third week of lock down.

Week one was chaos… I work in a cottage in my home, which is the only place with WiFi.  Needless to say, that first week my three children and husband descended into my quiet place, my productivity went pear shaped and I was less than gracious about the invasion!!!  The good news, is that week two was way better, and week three feels like i’m settling into a new rhythm.

So my thoughts on this, merged with my latest interview on my podcast are as follows:

  • Be intentional about the social media and the news you are consuming right now.  If your news feeds and WhatsApp groups are anything like mine, people have WAY too much time on their hands that I personally don’t.  What you fill your mind with becomes how you will feel.  And if it’s all doom and gloom, it’s going to lead to you feeling doom and gloom.
  • Be gentle on your expectations of what you can achieve.  For me, I’m not able to achieve at the same level as I am usually able to.  I need to help with Afrikaans reading, have lunch with the girls (and not at my desk), and I can’t record my training videos and podcasts with my husband having a video conference in the room next door, and my kids in and out.
  • Listen to your ‘gut’.  Now this one is a challenge for all of us logically minded people… but I’ve been much more disciplined about acting on what I ‘feel’ like doing.  When things are hectic in my office with school projects and John’s conference calls, instead of sitting getting angry, I pick up a piece of work that doesn’t need my computer and go find another spot.
  • Use the time to create.  For many of us, gaps have opened up in the diary.  For me it doesn’t mean the work has got less, but there’s no travel time.  Instead of filling it with admin or to-do list stuff, fill it with creating new things.  The difference between urgent and important.  So when life opens up and the economy starts growing again, you’re ready to capture the opportunity.  I’m working on two new courses at the moment which will accompany my book launch in June.

In these crazy times, simplify your life to worry only about that which you can control – because anything beyond that will lead to way too much stress.

Stay safe!