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Helping Secure Your Future in Turbulent Times

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.

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.

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.

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.

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.

Billy Hensley President and CEO of the National Endowment for Financial Education (NEFE)

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.

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.

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?

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.

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.

Billy Hensley President and CEO of the National Endowment for Financial Education (NEFE)

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.

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.’

All 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.

Mike Cocco Equitable Advisors financial professional, Nutley, New Jersey

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.

Duly registered and licensed Financial Professionals offer securities through Equitable Advisors, LLC (NY, NY), member FINRA, SIPC (Equitable Financial Advisors in MI & TN), offer investment advisory products and services through Equitable Advisors, LLC, an SEC-registered investment advisor, and offer annuity and insurance products through Equitable Network, LLC (Equitable Network Insurance Agency of California, LLC; Equitable Network Insurance Agency of Utah, LLC; Equitable Network of Puerto Rico, Inc.).

This informational and educational discussion is not intended – and should not be relied upon – as investment or financial advice. Investing involves risk, including loss of principal invested, and you should carefully consider your own time horizon, goals, objectives and tolerance for risk before investing. Asset allocation does not guarantee a profit or protection against loss in a declining market. Past investment and market performance does not guarantee future results. Systematic investing does not assure a profit or protect against a loss in declining markets. Because such a strategy involves periodic investments, you should consider your financial ability to continue purchases in periods of low price levels.

Equitable is the brand name of the retirement and protection subsidiaries of Equitable Holdings, Inc., including Equitable Financial Life Insurance Company (Equitable Financial) (NY, NY), Equitable Financial Life Insurance Company of America (Equitable America), an AZ stock company, and Equitable Distributors, LLC. Equitable Advisors is the brand name of Equitable Advisors, LLC (member FINRA, SIPC) (Equitable Financial Advisors in MI and TN). GE- 5280687.1 (12/22)(Exp.12/24)