Investing in Turbulent Times

By Bob Barber, CWS^®, CKA^®

What’s causing the turbulence in the markets?

1. The Ukraine Russia War, fear of escalation, and possibly the use of nuclear hypersonic missiles
2. Record High Inflation from too much government stimulus
3. Fears of what higher interest rates and a tighter money supply could do
4. The Real Estate bubble
5. Political leaders that seem incompetent when doing their job
6. Computer Chip shortages for manufacturing, especially for vehicles which is the second-largest purchase most people make behind buying a home, and its very noticeable
7. Continued Supply Chain disruptions from leftover Covid
8. A shortage of workers to fill needed vital positions in the marketplace even with unemployment at record lows

How should you invest in a time like this?

1. Invest in companies we all need to survive a normal lifestyle. For example, ones that produce food, clothing, shelter, technology, energy/utilities, healthcare, transportation, etc.
2. Use a well thought out, long term investment strategy
3. Understand that turbulent times are nothing new, and they will always come along every 2-3 years.
4. Keep emotions and feelings out of investing.
5. Be leary of professional doomsayers who make a living from selling fear. They take advantage of people during turbulent times by selling high commission products like gold and silver, high fee indexed annuities, or even a subscription-based newsletter you have to subscribe to. These professional doomsayers are all over social media, the internet, television, and even mail out thousands of seminar invitations offering a free steak dinner to lure you in. Those seminars cost them thousands of dollars, but just the sale of 1-2 high commission annuities makes up for it to the people doing this.
6. Look for investment opportunities instead of running from them.
7. Stay cautious of the tendency to chase returns. During turbulent times something will always be way up when everything else is down. Be careful of buying high.
8. Stay patient. Stay patient. Stay patient. It is not a time to panic!
9. Think long term in 3-10 year increments verses 3-24 month increments
10. Seek experienced investment counsel from someone that has been through several turbulent times many times before. This may mean someone older than you.

In my life alone I have seen: the Vietnam War; Watergate; President Nixon’s resignation before he was impeached; the oil embargo where just getting a gallon of gas for your car was nearly impossible; President Carter’s years of double-digit inflation; Black Monday and the stock market crash in October of 1987; the collapse of the Real Estate markets in the late 1980’s that lasted for many years; the internet bubble crash of the early 2000’s; the real estate crash again in 2008; and the temporary market crash from COVID just a few years ago.

Realize that Turbulent times are a normal part of life, but investing and staying invested during them can be difficult if you’re doing it alone, so DON’T!