As a child on a driving vacation, (before GPS technology) some of our favorite family road trips were through the Appalachian Mountains in Tennessee. My siblings and I would take turns following with their finger along the atlas map, focusing on the twists and turns, the rest stops, historical landmarks and small towns we would pass through. Driving through the mountains, a straight line is almost impossible most of the time. To get to our final destination, we had to zig-zag through mountain passes, meandering up and down terrain, sometimes backtracking in order to go forward. Sometimes the road ran along steep cliff drop-offs that caused my mother to feel similar fear and white-knuckles that the coronavirus news stories are causing you to feel today.
With such a long bull market run, we sometimes forget that markets sometimes go down too. When we think back to the 2008/2009 recession, we often remember the sense of despair and helplessness that accompany a declining stock market. The principle of "loss aversion" in the scope of past behavioral studies points out the pain of loss is about twice as great as the pleasure we receive from gaining.
We know innately that building wealth, in the simplest terms, occurs by buying low and selling high. Panic selling when the market has fallen is the best way to do the exact opposite of the best way to build wealth. The current pain you feel when you watch the news or check your account or 401(k) balance is over-sized right now, but will pass in time. Like our vacation station wagon, investment account balances sometimes up and down, sometimes taking you on unexpected detours. Getting out of the car on a steep cliff road, or when a black bear is outside your automobile is a worse idea than staying on the road driving towards the eventual destination.
Ultimately, we would reach our final destination and look at how far we had come, how many states we had crossed, and how many cities we had driven through. Taking a longer range perspective was more important in the overall vacation than the short detours, Stuckey's lunch stops and bathrooom breaks that slowed down the trip along the way. Keep a long term focus on what your financial goals and control what you can. Take a moment to look back at how far you've come and look forward to planning for what's ahead, but don't let the fear keep you from enjoying the ride.