The “Crazy Stock Market” Recovery Plan: Focus on Golden Rule(s) of Personal finance (PART 2)

Given the crazy virus related economic conditions, let’s use this time as an opportunity to reset priorities and get back to personal finance basics.

In this post we will continue with reviewing the basics and resetting ourselves – See Part One Here.

Now What? – As we mentioned on our last market update post, it’s best to focus on helping others instead of focusing on negativity of the markets.

However, if you just can’t help yourself and continue to look at the current market situation (myself included), its probably best to renew your focus or direct your attention in a positive manner.

Let’s continue with our recovery plan for this current financial situation:

Recovery Plan – The Golden Rule(s) of Personal Finance

Therefore, let’s reset our focus and start working on the Golden Rules of Personal Finance

  • Rule #1 – “Spend Less Than You Make” – See Part 1 of this post.
  • Rule #2 – “Save, then Invest” – See Part 1 of this Post
  • Rule #3 – “Focus on What You Can Control – Ignore the Noise
  • Rule #4 – “Stay Diligent, Be Conscious of Your Emotions

Rule # 3 – Focus on What You Can Control – Ignore the Noise

As we continue on our recovery plan, another key piece of our recovery rules is to focus on what you can control and tune out the remaining noise.

This rule is more of an emotional and intellectual focus rather than an action based focus item – The best method to combat this is to “filter out the noise” – It probably best for everyone to become more sensitive and aware of what we are exposing ourselves to. Limiting our exposure to the effects of 24/7 news and business related articles can improve our collective mental health. The constant waves of information, opinion and frequency of information can adversely affect investors – See article here.

Now let’s focus on what we can individually control – How we react and respond to external circumstances. If we refer back to our article of “What’s Next For the Stock Market, How do you React?” we can see the following summary of topics that we discussed.

What can you do?

  • Keep your fears in check – Remember the only people that get hurt on a roller coaster are those who jump off mid ride!
  • Ensure your portfolio is well diversified – See here for our thoughts on this; this should smooth out the bumpy ride.
  • If possible, hold and buy more – Use the additional power of sinking asset values to purchase more investments for the same investment dollar – See option 3 above.
  • Do Nothing – Sometimes the hardest move is going to be to do nothing at all – Wait out the storm ⛈

Rule # 4 – Stay Diligent, Be Conscious of Your Emotions

On the last point, we will continue on the path of emotional wellbeing and how that impacts your success as an investor. One of the toughest things to manage is the emotional side of investing. When the world is declining around you, it’s very, very tough to maintain a clear head and make rational decisions.

Let’s review our daily point change for the past few months – We see the severe volatility that is playing out on an almost daily basis.

Based on this chart, do we have confidence that the market will increase or confidence that the market will decrease?

Well that’s the Million or should I say Billion dollar question. As we all know, no one can accurately predict the future. So therefore, we should not let either greed or inversely fear of the market drive our actions.

It’s best to remain level headed and be conscious of your emotions during this period of sustained and substantial volatility. Be aware of triggers like news, opinions or situations that cause your emotions to flare up and drive you to either positively or negatively.

Remember there is only 3 Courses of Action to Take:

Overall, it’s best not to panic and lock your investments at a downward period; nearly a 20-30% loss from 2019 highs – Despite the rush of panic inducing headlines and media hype surrounding the current virus situation. Moreover, as we are all typically motivated to action during times of external crisis to do something, it’s probably best to sit tight financially and not make any sudden moves to sell or liquidate your investment assets. Additionally, if you have extra courage, you can use these market dips as a buying experience – Using dollar cost averaging to lower your investment cost basis.


We know that these are difficult times and economic conditions are changing by the day and by the hour – Our hope for you is that you and your family are safe and healthy.

Additionally, we hope that the content of this post can help bring some stability and security on the financial aspects of your situation.

Focusing on improving our situation and thinking and hoping for a better future is a much better mindset than being negative and scared. Remember, we are all in this together, around the world.

We wish you and your family stay safe and healthy. We will meet again in the next post – Thank you for reading.

Sincerely, The Lab Manager.

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