Goodbye 2020

To say 2020 has been an interesting year would be a massive understatement. Although in many ways it has been uncomfortable, it has also given us some time and space to take stock. And from my perspective as an ‘older adult’, yes ok, a senior citizen, the times of most discomfort provide the biggest lessons in our lives. When viewed with a curious mind we can find all kinds of useful learning opportunities through these times of COVID-19.

Here are some things that have not changed but perhaps we needed to be reminded of:

1. Obvious personal reminders are that our chosen loved ones and family are important to us. Personally, experiencing loss or separation or knowing others who are suffering, provides clarity about what is important and who is essential in our lives. And possibly who we could do without.
2. The other personal reminder is that our health is probably THE most important aspect of our lives to protect. Without it, we can’t work, help ourselves or others, and it severely limits our life choices.
3. Financially, we have been reminded of the oft forgotten basics of a sound financial and investment plan.
   • Have an emergency fund – in case you can’t work for a while. You still need to pay your bills to live, and you do not want to dip into your retirement savings, especially when markets are down.
   • Don’t sell in a panic. We did experience a big drop in the value of most stock markets in March. If you had sold you would have missed out on the subsequent growth. And if you were forced to sell because you didn’t have an emergency fund, you would have experienced a permanent loss. At this writing markets have not only recovered but have advanced (and in some sectors a lot) over the past year.
   • Buy on the dips – It’s hard to have faith in the markets when it seems the world is falling apart, but those that put money into the market in March have done very well.
   • Hire Professionals -professional money managers don’t invest emotionally. Even if you were skittish to buy in March, most of our portfolio managers went into the downturn with sufficient cash in their funds to buy some great companies at low, low prices. And buy they did.
   • Diversify – There are actually various styles of investing that work differently depending on current economic conditions. Those investment managers that were fully invested pivoted their holdings, choosing companies well positioned to go into this unusual economy. Ecommerce companies, tech companies that supported working from home, and home fitness companies are a few examples. Other managers stuck to their methods, buying more of the companies they already own, looking to next year when other sectors of the economy will outperform as we open back up. We need to have exposure to different styles of management, geography, and asset classes such as stocks, bonds, and cash to be sure we can reduce our risk and participate in the growth as it cycles through the economy.
   • Regular savings – those who save every month are by far the most successful investors. They don’t think about it, it just happens, before they spend on other ‘stuff’. They don’t have to try the impossible task of timing the market. They automatically buy more when prices are low, and less when things are expensive.

So, what is 2021 and beyond going to look like in your life? That depends on your plans. Try putting down your own intentions on paper. Start with an overall vision of how you would like each part of your life to look in the future – personally, physically, spiritually, and most pertinent to us, financially. Then break down each category into actionable steps to reach your goal. The more detail the better since it is really gratifying to cross out each step as you initiate and attain it. Ask for help in the areas you feel unqualified or unable to do yourself. The nice lesson from COVID is that many, many people love to help those who need a hand. Use the financial list above to formulate any changes you want to make in your financial life.

We can all look forward to seeing the year 2020 in our rear-view mirror. Wishing everyone a fabulous, productive, and healthy 2021.