Navigating Market's Turbulence: Lessons from Air Travel

When we experience a year with market drops, it sometimes warrants a response for investors. You've seen the news headlines and are aware inflation concerns, combined with the actions of the Federal Reserve, are the major drivers of the recent pain we've felt.

A Brief Trip Down Memory Lane

Although it may seem a lifetime ago, it was only in 2020 when we faced unprecedented fears with the Coronavirus and the ensuing lockdowns. Remember that feeling when our retirement accounts suddenly plummeted? Most would agree that the rumors of the markets demise were overrated. I can't predict the future, but I do know that the market will go up, and it will go down. I also know that the news media is going to capitalize on any event, today and in the future and it will cause fluctuations.

The Human Element: My Husband's Fear of Flying

Some people handle these ups and downs better than others. If I can make a comparison at my husband's expense, it's like flying. Some handle it calmly, while others are terrified of the experience. My husband is among the latter.

He doesn’t like flying. He sure likes getting to wherever we’re going, but he absolutely has no stomach for the ride. Every time there’s the slightest bit of turbulence, his face turns ghostly pale, he does a death grip on the arm rest and has this look of pure terror on his face.

If the other passengers were to judge the outcome of the flight by his mannerisms, it would look like a scene from the movie Airplane. This is a normal occurrence most flights, but we land safely, he exhales and we have a great time.

Really, he should just relax, just like my clients do when there is volatility in the market. When we create an investment plan, we know ahead of time that there will be turbulence. It doesn’t matter that the ride might get a little bumpy, as long as you arrive where you’ve planned.

Drama in the Skies: A Personal Tale

While my husband is uneasy while flying, he isn’t completely irrational in his actions. At least he remains in his seat. Good idea, right? Well, you can imagine my surprise, when a routine flight take-off was suddenly charged with drama as we saw a panicked fellow passenger do quite the opposite!

We were accelerating down the runway when a middle-aged man RAN to the front of the plane! Just as the wheels were taking off, he disappeared into the unlit front portion of the cabin, right by the pilot’s door and was intercepted by a very concerned flight attendant! Let me say, more than just my husband was a little unnerved at this point! Was there a crazy person on board? What was going on? It was dark up front, so we couldn’t see, but we knew the flight attendant was talking in a tone that was demanding. “SIT DOWN!”, we all heard…

It struck me that this erratic behavior is the same mindset that leads many to actually put their investments at risk when they are emotionally charged with fear. I certainly wouldn’t recommend overreacting or trying to bail out. Some do.

Market Volatility and Long-Term Strategy

I know unusual things happen on planes, just like they do in markets. We know that battling inflation has added volatility over the past year. There will always be new headlines, and any of them could mean turbulence for Wall Street.

As an investor and retirement saver, how much will this turmoil matter to you in the long run? Not as much as you may expect. There are many good reasons to remain in the market rather than attempting to intuit or guess when and where big shifts in fortune may arrive.

The Role of Planning and Guidance

I believe it's important to build a financial strategy that diminishes the need to factor in market timing. We plan a strategy that is based on their risk tolerance, goals and time horizon. This balanced approach means there isn’t a need to feel nervous when volatility arises.

Similarly, everything turned out okay for that erratic passenger on my flight. The hero was a patient and kind flight attendant. Just when we all thought she would be forced to physically restrain him, she somehow calmed him down and got him to sit beside her for the ascent. We heard her gently and firm assurances that he MUST stay seated, but he could get up in just a few minutes.

Facing the Unpredictable: Lessons From Flying and Investing

After we were cleared to move about the cabin, it was obvious what the issue was. He desperately needed the restroom, due to queasiness created from the stress of flying.

I realize that when it comes to retirement accounts, investing can be stressful just like flying. When it becomes overwhelming, it’s important to look at the outcome and have someone there for you when the ride gets bumpy. Like the flight attendant, I can be the voice of reason to help ride the turbulence of the market on the way to your goals.

But it's critical, now more than ever, to have a plan that is in alignment with your risk tolerance! It's possible that unsettling feeling is a warning that your portfolio isn't adjusted properly, leaving you at risk!

Krista McBeath is an Investment Advisor, Chartered Financial Consultant, a Licensed Insurance Advisor, a Fiduciary, and an experienced tax advisor who specializes in financial planning, investments, and insurance. She utilizes advanced tools for in-depth calculations that analyze tax and retirement scenarios to help her clients avoid a future tax time-bomb. Whether this means enjoying more of your hard-earned money in retirement or passing along assets to loved ones with less tax burden, planning makes the difference.

Her Amazon best-selling book, The Generational Wealth System outlines a holistic approach to preserving lifestyle, wealth and legacy.

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