As we constantly scan headlines and refresh our browser our anxious brains internal monologue is:"Don't stand there, do something!"
But in the words of the late, great John Bogle: "Don't do something, stand there."
Anxiety and uncertainty shrinks your field of vision at the worst time. On Wednesday morning while I ate breakfast, the year ahead looked entirely different than it did by lunchtime. When the world is changing as rapidly as it has for the past week, it's impossible to think more than a day ahead.
The challenge is that long-term thinking is most powerful when everything is falling apart.
"Don't do something, stand there."
This is a terrible time to be short-sighted.
Human beings have a tough time conceptualizing very big or very small numbers. This is why our news media has been overrun with charts, graphics, illustrations and animations to try to make sense of this epidemic.
We also have a hard time making sense of relative values. The market today is still higher than it was in December 2018, but that doesn't make us feel any better when trading halts three times in one session.
I have almost zero expectation of good news. So good news, when it comes, will feel sensational. This is true for both market prices and (more important) people’s overall optimism.
Necessity is the mother of invention, so our willingness to solve problems is about to surge.
Look at the Great Depression:
Economist Alexander Field writes that “the years 1929–1941 were, in the aggregate, the most technologically progressive of any comparable period in U.S. economic history.”
Look at WWII:
Writing in 1952, Historian Frederick Lewis Allen describes the burst of scientific progress that came during the war: What the government was constantly saying during the war was, in effect: “Is this discovery or that one of any possible war value? If so, then develop it and put it to use, and damn the expense!”
Hang on. Stand there. Don't do something. Take the long view.
Whatever you want to call it, selling off your portfolio today in an emotional panic was not part of the plan. Something bigger and better is on the horizon and the markets will embrace this progress. If you can sit tight, you stand to profit from the next surge of optimism.