crisis management

Rational Optimists

Many businesses are weathering the pandemic by staying agile. Factories are retrofitting their equipment, computer-bound workers are getting more flexible working conditions, and food services are thinking outside the dining room. 

We recently read about how one brand we love is coping with COVID-19. The company Life Is Good has been slapping their cheerful slogans on shirts and coffee mugs for more than 20 years, and they had some tough decisions to make this spring. 

We had the pleasure of hearing from co-founder Bert Jacobs a few years ago. What struck us was that their flavor of optimism embraces life for its messy beauty. 

After 9/11 and the Boston Marathon bombing—moments when it would’ve been easy to fall into despair—the company responded. They sent the proceeds from special themed products straight to charity. Today, they’ve transformed their production process to make space between workstations and to be able to print shirts on-demand. 

Their core belief that life is good hasn’t wavered, and it’s served them well. Jacobs explains that their community is one of “rational optimists.” These are people who like to say, “Life isn’t easy, and life isn’t perfect. But life is good.” 

(And for whatever it’s worth, as of early July, they report zero COVID cases among employees at Life Is Good.) 

That idea has served us well, too. Life has not been easy, but here we are today. Life is good. 

Clients, if you want to talk through this or anything else, call or write. 

Go Hard, Breathe Easy

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Being calm seems to come easier to some. Maybe it’s a natural disposition, but for some folks we know, they went hard until they could breathe easy.

Many of our friends and clients have what they have as a result of a lifetime of work and savings. They’ve weathered storms and chose to ignore fads. They decided on some goals and set things to work toward those goals.

Those things didn’t happen all at once. But each of us can choose a little hard now to take it easier, later. The costs of deferring pain are sometimes far too high—and we don’t realize it until it’s too late. It’s credit payments that pile up. It’s deferred maintenance that we wake up one morning to discover is now an emergency. It’s a routine that felt too hard to keep up, and now our wellbeing is anything but well.

Is it possible to buy yourself some calm, even in times of challenge? Those may be the best times to invest in some calm.

Keep your emergency savings at a level that feels right for your family. Keep working your plans; make them automatic where possible.

Know that this challenge will not last forever. (In fact, a new best and a new worst will always await us. Such is life.) We can hope that each new challenge will be more meaningful. We can hope each will make us wiser and will cause less damage.

It won’t just happen that way. Some may be born with more calm, but some of us go hard until things aren’t so hard.

Can you work with something hard today? It may help you breathe easier tomorrow. Clients, if you would like to talk about this or anything else, please email us or call.

Dealing with Financial Emergencies, Three Things

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The dramatic and unexpected events of 2020 have tested our adaptability and resourcefulness like no other. There are patterns in those who are navigating these times successfully.

1. Realize there are usually lessons in history to guide us; maintain perspective.
2. Avoid hasty decisions that could have negative long term consequences.
3. Look for the opportunity in the challenge, not vice versa.

By taking time to think about the context, understand our own situation, and get accurate information about whatever the new reality is, we usually can make better decisions.

In personal finance, tapping high interest credit cards to maintain spending in the face of income reductions may be necessary for some items. But any outlays that can be avoided, or are discretionary, should be deferred, not financed. The average credit card interest rate remains in double-digit territory, a huge drain.

In your investments, long term holdings should not be disrupted by short term considerations. When the situation changes in ways that everyone knows, the new circumstances are likely to be priced into the market already. So there may not be an edge in taking action. If you do not need the funds in hand for pressing purposes, you might leave them be.

The stress of the situation may be alleviated by working on things within your control. Practicing healthier habits with regard to exercise, nutrition, sleep, and alcohol can also reduce stress, while giving you a sense of conrol.

Finally, contact with other people is a necessity for social beings such as humans. It may be especially useful as you talk things out or need someone to bounce ideas off of. We would be happy to visit with you by phone or email, Zoom video or in person – about whatever is on your mind. Email us or call.

Flattening The Curve

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We have worked to understand as best we can the coronavirus. There are a lot of aspects to it: the health and safety of our family and friends, public health considerations, economic and investment effects. All this, while sorting through information and misinformation of varying quality.

Which of these are true?

“Most people experience negligible symptoms, or those of a typical case of the flu” or “The virus can cause rapid respiratory failure and death”?

“People who have no other health problems and are below age 60 have little risk” or “It is important for everyone to do what they can to slow the spread of the virus”?

“The experience of other countries should comfort us” or “The experience of other countries should concern us”?

Get your mind wide open, because all of these things contain some truth. Those who are below age 60 and healthy will likely only get mild symptoms with a low risk of death. But healthy people can spread it to at-risk people.

Do you have an elderly neighbor? A young cousin with asthma? Relatives with diabetes or cardiac disease? Are you around people that have organ transplants? Or being treated for cancer? No matter what course the virus takes in the weeks and months ahead, some people with those conditions are probably going to be struggling to stay alive. Not all will survive.

To protect ourselves and others, it makes sense to do what we can to slow the rate of infection. If cases spike up rapidly, hospitals will be overwhlemed, with catastrophic effects on care. (This happened in parts of Italy.) If the rate of infection is more moderate, health facilities have a better chance to stay ahead of the curve. It makes a difference on the death rate.

The experts call this moderating effect of slower infection rates “flattening the curve.” It’s a good thing.

The extremes are not where we want to be: the virus is not going to kill us all, but neither is it a big hoax. Clients, if you would like to talk about this or anything else, please email or call.

What Comes Next? Three Paths

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Psychologist Shawn Achor wrote about crisis and adversity, recurring features in both the markets and life. Stuff happens, as they say.

Achor says there are three alternate mental paths in the aftermath of crisis.
The first one leads nowhere. We simply expect the crisis conditions to continue. The second one leads downward to more trouble, a continuation of the trend. We humans do tend to believe current conditions or trends will continue.

Finding the third path is difficult when times are tough. Many people do not see it because they do not believe it exists. The third path leads from the challenging conditions to greater strength, capabilities, opportunities and success. Think of it as falling forward.

Studies show those who conceive of failure as an opportunity for growth are more likely to find the third path, and experience that growth. Others have talked about the same concept with words like resilience and grit, or more vividly, post-traumatic growth.

We see this pattern in the investment markets. Although historically the stock market has recovered sooner or later from every downturn, some investors do not recover. Those who can only see the first two paths have a hard time staying invested. If they sell out at low points, believing the crisis conditions will continue or worsen, what might have been a temporary loss becomes permanent.

By the time they see the third path, the market may have already recovered. Their diminished pool of capital can only get reinvested at higher prices, perhaps to repeat the cycle of crisis and loss.

Fortunately, here at 228 Main you clients tend to have productive attitudes toward investing. You can see the third path, which is a big advantage. If you would like to talk about this or anything else, please email us or call.


Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.

All investing involves risk including loss of principal. No strategy assures success or protects against loss.