I go on vacation for a week and look what happens!
First I apologize for not having any updates last week, but for what it’s worth I did enjoy a nice, Internet-free family vacation at a cottage in Michigan.
I managed to rest, which was much-needed and very beneficial for me.
I came back to a big surprise in the market, and figured a response to the goings on would be beneficial for readers today.
Here is your 3-step survival guide for the market mayhem:
1. Remember That God Is Still In Control
No matter what happens in the market, God reigns.
He is in control.
This should be an incredible comfort in times like this.
I can’t help but think of the story in Matthew 8:23-27 where Jesus is sleeping on the boat while his disciples panicked as the fierce storm rocked their ship. Jesus finally woke up and rebuked the winds and waves, and “there was a great calm”.
Ultimately, if you are a believer in Jesus, you have nothing to worry about.
Yes, we may experiences job losses, investment losses or worse. But the fact remains – God doesn’t forsake his children (Hebrews 13:5).
Jesus’ words on worry in Matthew 6:25-34 ring as true today as they did nearly 2,000 years ago. The key is this:
So if we head back into another recession (or gulp, a depression), please don’t waste it. There may be major lessons God wants to teach you (as he has taught me in the past 3 years!).
2. Don’t Just Sit Back and Watch
Yes, God is in control, however, that doesn’t mean we sit back and do nothing.
God has given us minds to use, eyes to read and see, and ears to hear the advice that is out there. I agree that advice can be a little conflicting during times like this.
It’s important to sift through the proverbial Bears and Bulls and come to a good decision for yourself with regards to your portfolio and your personal finances.
You may want to name a percentage or a dollar amount that you are “willing to lose” before you dump positions in stocks and/or bonds.
I don’t give investment advice on this site, but let me offer a few sites for you to do your own research:
- How to Embrace Your Portfolio for Another Recession
- Don’t Panic: The US Credit Downgrade Changes Nothing
- How Much Worse Can It Get
In this volatile market, it may make sense to get a little more defensive than normal.
The volatility index (VIX) jumped 77% last week at its peak! These are turbulent times, and unfortunately we don’t know how long to expect this trend to last.
3. Go Back to the Basics
Basics, basics, basics. Times like these require us to get back to the basic rules of personal finance.
- Destroy your debt - Just because the U.S. Government doesn’t seem to care about it’s debt overload, doesn’t mean you should follow their lead!
- Spend less than you make - It doesn’t matter how much you make…spend less than that in order to get ahead!
- Be more generous than ever – It’s easy to think we must hoard our money during rough times, but God challenges our paradigms. More people need our help in this economy, so allow yourself to become even more generous.
- Save 10%-20% of your income - If you’re not saving this much, push yourself as much as possible to get to this point.
- Diversify your portfolio - Diversify your holdings with stocks, bonds, and alternative investments. Don’t forget to diversify from a tax-standpoint too!
- Diversify your income - Whether it’s a side business, dividend income, or making money online, multiple streams of income are key during this economy.