Markets are falling
How can I drive myself nuts?
Watch them every day.

“Systematic risk” is a fancy way of describing the panoply of causes behind why markets rise and fall. Inflation, a tightening monetary policy from the Fed, the threat of rising taxes, international conflicts, pandemics, etc. impact markets comprehensively. It is simply impossible to diversify oneself into a completely safe place where all of your investments are riskless.

For most of us, putting our money to work in the market is a necessity to ensure that we don’t run out of funds in retirement. But to be in the market is to be in the ocean. There will be waves – some big, some small. There will be moments of placid, glassy stillness. But they will pass, as will every other state. Impermanence is a feature, not a bug.

One of the ways to ease motion sickness when out at sea is to look at the horizon (if you can bring yourself to look up at all). For some reason, looking far away at the “line where the sky meets the sea” (thanks Moana) can take someone from the edge of uncontrollable nausea to being relatively ok. So it goes with watching your investments.

To focus on the capricious day-to-day whims of the market is like staring at your feet in a rocking boat. You’ll quickly find yourself completely miserable.

Instead, set a schedule, ideally no more than once per week, where you briefly look at your accounts. Some regular attention is necessary just to make sure your beneficiaries are correct and that no unauthorized transactions have occurred. But if you have worked on your financial plan and determined what the percent of aggressive vs. conservative holdings should be in your total portfolio, there is little to be gained from closely monitoring your accounts.

“Time in the market beats timing the market” is a cliché for a reason. It’s true. Are there exceptions? There are exceptions to everything. A market downturn is a great time to look at tax-savings opportunities in taxable accounts, or to consider a Roth conversion in an IRA, or to adjust your allocations if the losses are just too much for you to stay committed to your plan.

Unless misery is your goal, think about looking at the market the way you might treat eating pizza, or having an ice cream sundae. Entertaining every now and then, but probably a recipe for disaster if you do it all the time.

If instead your aim is contentment, keep your focus on your financial horizon: the reasons why you invested. Know that every financial plan assumes stretches of poor market performance. At SeaCure, we present income plans with a “worst case scenario” where market returns are -1.5% every year for the entire plan. I don’t know what the future holds, but I know that won’t happen.

Your future happy self is waiting for you out there, where the sky meets the sea.