Marion's Blog

At breakfast earlier this week, I was eavesdropping on the conversation at the table next to me – I know, absolutely not the done thing – but I am still glad I did. The group next to me was discussing the economic crisis as so many people do these days. One lady said: “well, we are just trying not to worry about it and check our pension plans all the time. Before this started we didn’t do so either and there is no point in doing it now, we don’t need it yet anyway”. If it hadn’t been for the fact I didn’t want to appear any more rude then I was already being, I would have stood up and applauded loudly.

She really struck a cord with me, and it got me pondering on how people are reacting to this crisis but also to adverse circumstances in general. It all comes down to how you handle “fear”. What makes the markets so turbulent at the moment, is fear – fear of the unknown, not knowing if there is an up tomorrow, or if markets will tumble further. I have always maintained that investing in art is almost the same as investing in the stock market – much to many professional’s chagrin. They obviously would like us to believe it is much more scientific then investing in art but I think the underlying factor in both types of markets is always emotion. How we all feel about the piece of art, or the share in question or the market circumstances is what makes an instrument valuable or not. And now that we suddenly find that the world is less straightforward then we all hoped, and banks less reliable – fear is the overriding emotion, which therefore has a negative impact. But the lady at breakfast was so right – if you invested for the longer term, and you continue to invest now, you will come out fine in the end. Just don’t watch what goes on between now and say two years, and you have nothing to fear – the result will be the same whether you watch every second or not. If you are not close to retirement yet, don’t look at the 401K or pension plan now. You wouldn’t have done if it had not been for the crisis either, would you? Since all the gains as well as the losses are only on paper for as long as you don’t touch it, you shouldn’t let fear rule your actions and make you jump in at the worst possible time to do so – which is now.

Fear can be viewed as a negative – but I also think Fear can be a positive emotion. It is worthwhile acknowledging that you are afraid of something, and then using that emotion to do something about it. Let it be your guide, but don’t let it stop you dead in your tracks. The flight-or-fight syndrome is still in our genes – and hormones play a major role in all that you feel when you are afraid. But if you analyze what you feel, you can often turn this into something positive and use the fear that you feel to show you what you need to do to turn it around. Fear is not necessarily bad therefore – unless you allow yourself to get frozen by it.

Entrepreneurs who did well before, will continue to do well in a bad economy. That is simply because they do not look at the future and all the possible things that could go wrong or mess up their plans. In good times, they will take each hurdle as it comes and find a solution for it. In bad times, it will be no different. Don’t be so scared that it paralyzes you, simply deal with each issue as it comes your way and you will be absolutely fine. Now, isn’t that a great lesson to walk away with after a nice breakfast??