Helping Secure Your Future in Turbulent Times
From fluctuating markets to soaring inflation, investors are facing uncertainty. Here’s how to cope with anxiety today–and still reach your goals for tomorrow.
Illustrations by Joanna Ławniczak
Billy Hensley knows better than to panic. As president and CEO of the National Endowment for Financial Education (NEFE), a Denver-based nonprofit that works to improve and maximize the impact of financial education, he understands that financial markets can fluctuate, that good days follow bad ones (and vice versa), and that over time, keeping calm and carrying on as an investor is a proven way to reach one’s long-term financial goals.
Nevertheless, he still gets nervous about his retirement investments from time to time—particularly right now.
“Last year, I am sure it was much easier for anyone with an IRA to log in and look at portfolio balances,” Hensley says. “Seeing the number increase is always a positive feeling. Personally, I have avoided looking at my balance this year very much.”
“I know that if I’m patient and I’ve diversified [my investments] well, with my risk spread out, that eventually growth will come back. It will be a more positive experience to see the balance. But it has taken me years working in financial education to fully trust the cycles and to back away from looking at that balance. Sometimes, it can be hard not to panic.”
We live in turbulent times. Following a decade-long bull market, investors currently face slumping markets, rising interest rates, resurgent inflation, geopolitical conflict, and an ongoing pandemic—all of which is creating a climate of uncertainty.
In this environment, how should people think about securing their financial futures? Here’s what a group of experts had to say about coping with anxiety, putting bad news into perspective, and planning for a better tomorrow.
Continue scrolling for five suggestions on how you can weather turbulent times.
DON’T feel bad for feeling badly…
For most people, experiencing uncertainty can be challenging. It causes us to lose sleep, suffer high levels of emotional anxiety and physical stress, and even alter our perception of time—leaving us to feel trapped in a traumatic, slow-moving present, unconnected to the past and future.
Similarly, financial stress can spur feelings of shame, anger, and fear, all of which can produce depression. Researchers have found that people who are under financial strain and upset about it are more likely to have higher depression scores than those who are under the same strain but not as bothered by it.
The upshot? When the world—and your financial future—seems unpredictable, you don’t just see it on your monthly portfolio statements. You feel it in your body and mind.
Uncertainty comes in many different forms. Our brains recognize the lack of control, and urgently try to fill in the gaps and make connections in order to make everything whole. Unfortunately these efforts tend to have a negative tint. We can create a whole doomsday scenario within a matter of seconds.Leah Marone MSW, LCSW, Psychotherapist, Corporate Wellness Consultant, Charlotte, North Carolina
Financial stress in particular can lead to negative self-talk and occupy a lot of emotional space. Harsh, critical narratives begin to gain power and wiggle their way into every aspect of your day, which interferes with your ability to concentrate and be productive. Combating these thoughts is incredibly taxing, draining, and defeating.
It’s almost as if we threw everything that could happen in our global economy into the mixing bowl together, right at the same time, and now we’re stirring it up.Wendy Baum Equitable Advisors financial professional, Northbrook, Illinois
The common thread when times are uncertain is fear about what’s going to happen. None of us have a crystal ball.Angela Anderson Equitable Advisors financial professional, Akron, Ohio
When people get their statements these days, they show declines. So there’s a lot of worry, because there’s a lot of emotion that’s involved with people’s money. People are wondering what’s happening, wondering how long this is going to continue. Almost every day, I talk to clients about what’s going on.Evan Press Equitable Advisors financial professional, Los Angeles, California
but DO cope with uncertainty in a healthy way.
When people face uncertainty and financial strain, they tend to make decisions that prioritize the present over the future—something that in turn can work against long-term financial planning.
However, one of the healthiest ways to cope with not knowing what tomorrow will bring is setting achievable goals—such as paying off debt or building up your retirement savings—and taking steps today to meet them. This can help resolve mental and physical stress while giving you a stronger sense of efficacy and empowerment.
Emotions drive most people’s decisions. When they’re feeling stressed, we have to get them to think back to why we’ve made plans in the first place. This is not for the next year, or the next two years. We’re making the decisions that we’re making for the next 25 years.Gerald Grant, Jr. Equitable Advisors financial professional, Miami, Florida
Leah Marone MSW, LCSW, Psychotherapist, Corporate Wellness Consultant, Charlotte, North CarolinaAnxious thoughts are fueled by rehashing the past or anticipating the future. Redirecting your thoughts back to the present is a very effective way to combat such thought patterns and avoid rumination. The goal is to insert logic to help balance out the intense emotions that you feel. Three questions that I share with my clients to help them with this process are:
- What can I control?
- What are my options?
- What can I let go of, or surrender to?
Answering these questions won’t solve everything. But they begin to defuse the urgency, stress, and anticipation that comes with uncertainty. They act as a reset, and start to bring you back into the here and now.
Mike Cocco Equitable Advisors financial professional, Nutley, New JerseyOne of my clients, a couple in their 70s, called me the other day. They’re doing well. But they got their recent statements, and they were spooked because the market is down.
The first thing I did was acknowledge it. But then we broke it down and brought it back to their goals. They happen to live very modestly. Even though they are retired, they’re covering their expenses with Social Security, and not even taking dividends and interest out of their retirement investments. I’ve actually been telling them to enjoy themselves, go on vacations, do things!
So I said, okay, when you look at your statement right now, it will make you upset. But what does it mean in the context for your plan? You’re not taking money out now, and even if you did, there’s still a lot there that we could withdraw without touching your principal amount. We have plenty of time for that value to recover. By the end of the conversation, they felt super comfortable.
Another coping technique to try when you are bombarded with stress is to set a boundary with yourself and create designated ‘worry times.’ This time is scheduled in advance to create space to be present with how you feel. It could be time to self-assess, make a list, make a plan, cry, yell, or talk to somebody. It’s a time to validate—not judge—your feelings and thoughts even when they are uncomfortable. This block of time might be 10 minutes in the morning and night, or a longer block of time once a week. This boundary helps you avoid suppression and prevents these thoughts from constantly sabotaging your energy and productivity. You have a set time to be authentic and real with your feelings and your stressors. When the stress pops up during the day, you can remind yourself that there is a time to engage with it later, not now.Leah Marone MSW, LCSW, Psychotherapist, Corporate Wellness Consultant, Charlotte, North Carolina
DON’T sweat the headlines…
From rising food and fuel prices to ongoing armed conflict in Europe to volatility on Wall Street, it’s easy to read or watch the news today and feel both helpless and hopeless. However, it’s important to remember that events have always been both unpredictable and transitory—particularly when it comes to the economy. The financial picture looked rosy just before the dot-com crash of 2000 and the Great Recession of 2008; by contrast, 1970s stagflation seemed potentially permanent prior to the market boom of the 1980s.
Sometimes as financial professionals, we’ve got to help educate our clients and say, ‘Okay, listen, things aren’t performing the way we’d like them to. I’m not going to dispute that. But let’s just take a step back and put it all into perspective. There’s no straight path to anything. And we’ve gone through this turbulence before.’Angela Anderson Equitable Advisors financial professional, Akron, Ohio
People forget this market has gone up for almost 12 years straight—maybe there’s been one slightly down year or a flat year, but everyone’s used to the up, up, up. And so when you have a year that’s down, like now, they view it as almost like the world’s ending. But it’s not.Evan Press Equitable Advisors financial professional, Los Angeles, California
This is my 26th year as a financial professional. I’ve been through it before. Matter of fact, this is my third time going through a market downturn like this. And I share that with my clients—if you go back to 2008 and you go back even further, it did recover. When you design a plan for 15, 20, 30 years, there are going to be ups and downs in that process. This is one of those times. But in the long run, the market is normally up three times more than it’s down. So you’re still ahead of the curve.Gerald Grant, Jr. Equitable Advisors financial professional, Miami, Florida
but DO prepare for personal financial disruptions.
The major world events and other items that fill news websites and broadcasts are far less likely to impact your day-to-day life than personal financial disruptions. According to NEFE, the average American in any given year has nearly a 70 percent chance of suffering a financial setback via an unexpected major expense.
In addition, 96 percent of Americans will have four or more major “income shocks”—that is, major life and financial challenges such as a divorce, a serious car accident, an ill loved one who needs extensive care, or a sudden layoff—by the time they turn 70.
Billy Hensley President and CEO of the National Endowment for Financial Education (NEFE)Even in a good year—meaning inflation’s normal, the job market is as normal as can be, you’re feeling good, paychecks are regular, you were able to pay for the equipment for your kid at their after-school activity, you’re putting something away for the future—even in those years, 65 to 70 percent of people consistently experience an unexpected setback. It’s the broken hot water heater, the fender bender, and when it happens in a bad year, it makes everything even more stressful.
Then, when you think about income shocks, almost all of us will have four major ones. So, it helps to do as much as you can to prepare for emergencies, to do as much as possible to continue to give to your future self. It is not always possible, but if you can manage to do so, it will help you down the road.
To prepare for these personal disruptions, it’s important to take basic steps like creating an emergency fund, lowering your debt and maintaining good credit, and adequately insuring your house and personal property.
Unexpected expenses don’t know what inflation is. They don’t understand that you just got a pay cut. They don’t understand that you may have received a raise that’s half of what the cost of living just exhibited. Unexpected expenses are still going to happen. They’re always going to happen. So do what you can—by saving each week or each month—to have an emergency fund available. The more you prepare yourself to expect the unexpected in terms of your budget, the less disruptive it will feel.Billy Hensley President and CEO of the National Endowment for Financial Education (NEFE)
Mike Cocco Equitable Advisors financial professional, Nutley, New JerseyPreparing for a rainy day and a prolonged rainstorm also applies to retirement planning. I always talk to my clients about having an adequate emergency reserve bucket—even when bank [interest] rates were getting nothing, I even told them, ‘keep six months’ [of expenses] worth in the bank.’ People would say to me, ‘but it’s not earning anything in the bank.’ Well, that money is not geared to make more money. It’s there to be there for you if you need it.
That money also allows your other money to make money. What do I mean? During COVID, lots of people lost jobs or had issues with their businesses. The ones that were able to fall back on their emergency funds and didn’t have to liquidate any of their investments in order to hang on eventually enjoyed one of the greatest bull market recoveries in a long time. So having that fund is super important.
DON’T stop saving and investing for the future…
When times are turbulent, it can be tempting to stop preparing for tomorrow in order to feel more secure today—stopping contributions to or withdrawing funds from your retirement investments in order to have more cash on hand.
However, this approach in many cases can create greater long-term risk of having fewer resources in retirement than you would have had by continuing to save and invest.
One of my clients has this ongoing fear and continues to question whether to get out of the market. She tells me, ‘I keep watching my money go down. This is all I have, for the rest of my life.’ And I have to coach her and say, ‘Stay the course.’Wendy Baum Equitable Advisors financial professional, Northbrook, Illinois
The fight or flight reflex kicks in. People want to sell and stop the bleeding. But you don’t want to sell into a loss. You don’t want to create cash right now if you don’t need it. If you have the opportunity to let things ride out, you’re better off doing that. My mom and dad used to say, ‘don’t take a permanent solution to a short-term problem.’ Even though this feels like Armageddon today, if you look at the life cycle of our economy, eventually this, too, will pass.Stephen Dunbar Equitable Advisors financial professional, Atlanta, Georgia
Many of my clients make monthly contributions to their retirement investments. Some of them are telling me, ‘every time I put money in right now, it’s disappearing.’ And I say, ‘no. Every time you buy right now, you’re actually buying more shares. Because you’re buying on sale.’ I tell them to focus on their share balance, not their account value. The value of their account is just the value that the market is offering for their shares right now. But we’re not taking that offer—instead, we’re taking advantage of the discount. If you don’t need money right away, you should hope this bear market lasts, because it means you can keep buying at lower prices.Mike Cocco Equitable Advisors financial professional, Nutley, New Jersey
A lot of people think the biggest risk in retirement is the stock market. It’s not. The biggest risk is outliving your money.Evan Press Equitable Advisors financial professional, Los Angeles, California
but DO review your spending and budgeting—and make forward-looking adjustments if needed.
If money is tight, now is a good time to reevaluate and optimize your short term financial behaviors and habits. Can you reduce expenses in nonessential areas such as subscription services? Change your auto insurance or other recurring payments to get better deals? Negotiate with creditors to get more favorable repayment options on your mortgage or car loans? Ask your employer for a raise, or take fuller advantage of your benefit package?
Really look at your spending. Are you spending where you should? We have an expense worksheet for clients that covers everything from groceries to the car payment to budgeting for the kids to saving for Christmas—all of the things that are necessary. If we can take care of all the necessities, we can probably defer some of the other expenses. And that can allow us to still save for the future.Gerald Grant Equitable Advisors financial professional, Miami, Florida
Leah Marone MSW, LCSW, Psychotherapist, Corporate Wellness Consultant, Charlotte, North CarolinaFinancial stress is no joke—and again, can be very taxing emotionally. One of the best ways to avoid perpetual financial stress is to frequently check-in and assess what you are actually spending money on day-to-day. These self-assessments help you create a framework and establish boundaries necessary to live proactively rather than reactively. This mindset switch will prevent some of the stress and burden that comes with the unknown. Creating a plan can be overwhelming, but it’s essential—especially when money is tight and your priorities and mental wellness are constantly being compromised.
Another thing to remember is that sometimes we get caught up in the a comparison cycle and make purchases to compete with others or justify ourselves. If this is the case for you, take a break from social media and things that might trigger such thoughts. Spending money and purchasing things we don’t necessarily need can also serve as a distraction, one that allows us to avoid other, deeper issues we might be trying to suppress.
Billy Hensley President and CEO of the National Endowment for Financial Education (NEFE)Write down everything you spend in a month. That sounds basic and fundamental—but so few of us do it. Sometimes, it’s because we don’t want to face it. There can be a lot of leakage, if you will, in our budgets. I’m guilty of this myself. I buy things at the grocery store all the time that I don’t end up eating, or they go in the freezer, and then it’s six months later and I’m like, ‘why did I buy all those extra veggie burgers?’ If you look at everything you’re spending money on, you’ll surprise yourself at how quickly small things add up—and when you’re looking at inflation of seven percent, 10 percent, 12 percent on your grocery bill, it does matter.
The other thing to do, if you’re working hard and meeting your goals and doing well at your job, is to ask for a raise. Don’t be shy in saying, ‘I’ve brought great value to this company, the world has gotten more expensive, and my contribution here has also increased.’ It can feel weird and uncomfortable, but advocate for yourself. Do your homework and ask for what you’re worth.
DON’T give up on a diversified portfolio…
When markets are bullish, maintaining a diversified investment portfolio of stocks, bonds, and other assets is one of the best ways to take advantage of rising values while hedging against volatility—and in bear markets, it remains a sound strategy.
Billy Hensley President and CEO of the National Endowment for Financial Education (NEFE)You should try to diversify your retirement investments as much as possible, taking advantage of things like mutual funds and target date funds and all the options that hopefully your employer is providing to you. Then do as much homework as you can about your own investments—your 403(b), your 401(k), your IRA, your Roth.
Be aware that there’s no such thing as ‘get rich quick.’ There may be a few people who do really well when times are flush, and they’re going to get a ton of headlines, but that never, ever sustains itself. With long-term saving, it’s about the long game. The slow game. It’s being the tortoise, not the hare, and not panicking when the market has big drops in a single day or when those drops stretch out like this year.
but DO be creative about how you diversify in order to make your portfolio more resilient.
Turbulent times can be an opportunity to look more closely and holistically at your long-term plan, and to consider whether additional investment strategies and vehicles can better help you reach your goals. That can be especially true if you are trying to build more resilience into your portfolio, mitigating against financial shocks ranging from sagging markets to serious illness, disability, or untimely death. Annuities, certain types of life insurance, and other financial products all can be useful tools.
When the markets were tearing it up, that rising tide corrected a lot of mistakes. But now that there’s all this uncertainty, people are looking for the safe harbor. They’re asking, ‘is there anything else I should be doing? Are there mistakes I can avoid? Should I be looking for guarantees?’ The answer depends on where you are as an individual. But I think there are some overlooked things to consider.Stephen Dunbar Equitable Advisors financial professional, Atlanta, Georgia
One, most people don’t take full advantage of the health saving accounts that are available to them. You’ll want to discuss this with your tax professional as well as your financial professional to see if this option makes sense for you.Stephen Dunbar Equitable Advisors financial professional, Atlanta, Georgia
Two, people aren’t always maxing out their retirement vehicles. If you have the liquidity, do it. Build that larger nest egg. Three, look at investment strategies that let you build a tax-exempt retirement bucket. Again, most people aren’t. Four, bring down your debt burden—that’s super, super important.Stephen Dunbar Equitable Advisors financial professional, Atlanta, Georgia
Five, think about how to replace your paycheck in retirement, by which I mean, income that is guaranteed no matter how the markets are doing. If you can cover your fixed retirement expenses with guaranteed income, that gives more control over the remainder of your nest egg during periods like this. You can wait them out, and not have to sell.Stephen Dunbar Equitable Advisors financial professional, Atlanta, Georgia
DON’T try to time the market…
When the market swings wildly—or drops, drops, and then drops some more—it’s tempting to try to get in and out at just the right time. However, evidence shows that long-term investing tends to produce better returns than short-term stock picking.
I have a couple of clients who are very smart people. One of them calls me once a week, and he’s like, ‘I was reading about the inflation of this and that and I think that next week the market could have a dead cat bounce rally,’ and I had to say, ‘look, none of that really matters to your plan. We’re not investing for next week, or even next month. We’re investing for years and decades at a time.’Mike Cocco Equitable Advisors financial professional, Nutley, New JerseyAll this bad news makes for great TV right now. You have the 24/7 financial media, and they love sitting there and talking about it all day long because people watch it. But what does it really mean for the average investor trying to take care of their family and retire? A heck of a lot of nothing over the long term.
but DO educate yourself, find good information and advice, and make (and tweak) a long-term plan that is designed to meet your goals.
As you move through life, your life and financial goals almost certainly will change—and as the tumultuous present makes clear, so will the circumstances of both. Because of this, it’s smart to look at retirement planning as a perpetual work in progress. It’s not something you need to think about every day, but it is something to be reviewed and adjusted over time. Seeing a financial counselor or advisor can help with this process, as can taking advantage of other available financial advice and literacy resources.
There’s a lot of information available out there. The companies who sponsor your retirement plans often will offer educational webinars and seminars and information sheets. If you’re not confident and don’t understand a lot of the jargon, find yourself a financial advisor or planner—or find yourself a local community financial educator who will provide information and answer questions at a low cost, maybe even for free if it’s through a community center or church. There are different ways to get this trustworthy information through vetted sources. So don’t panic. Ask questions.Billy Hensley President and CEO of the National Endowment for Financial Education (NEFE)
One of the big questions we get is, ‘How does the current market impact my plan? Has it completely devastated it?’ And that is the whole reason we go through the process of financial planning. So we can step back and say, ‘let’s see. Let’s see how this drop has impacted the long term. And because we’re generally conservative in terms of worst-case scenarios, we’ve already factored in these downturns. So it’s not as bad as people think. They see the numbers, and they find peace of mind because we planned for that worse-case scenario five years ago. When inflation is soaring and interest rates are going through the roof and the market is going down, we can just revisit and tweak the plan. Ultimately, it’s not just having an initial plan. It’s having a nimble plan.Angela Anderson Equitable Advisors financial professional, Akron, Ohio
