Have you noticed how often the word ‘unprecedented’ has been used in recent times? The obvious reason being that we are in brand new territory with the Coronavirus, and this is a crisis like no other.
We’ve all had to make changes to the way we live, and while most of us have adapted to the ‘new normal’, there are still challenges ahead.
So how do we move to the next phase, and look to the future in the context of the same uncertainty?
After so much sadness and devastation, it’s natural to want to think positively, to look for reasons to hope. For example, we’d all like a timescale for when we’ll get back to ‘normal’ and an idea of what that might look like.
However, it’s also good to combine optimism with realism. That way we avoid having our expectations dashed.
There is a theory for this called the Stockdale paradox
The name comes from James Stockdale, a Vietnam veteran who spent seven years as a prisoner of war. He put his survival down to his ability to blend hard pragmatism with optimism for the future.
He says: “You must never confuse faith that you will prevail in the end—which you can never afford to lose—with the discipline to confront the most brutal facts of your current reality, whatever they might be.”
This is the approach we take with your financial plan
Although the initial ‘panic’ phase may be over, unfortunately we don’t know yet how the market will bounce back. Although it’s only natural to assume it will turn a corner soon, we are combining that optimism with the same realism James Stockdale drew on.
After all, the economic effects of the Coronavirus have in fact been greater than the experts initially thought. So rather than a swift ‘bounce’ back, we are prepared for there to be more of a ‘wobble’ again before this happens.
But this is just the kind of obstacle we work with. Your financial plan has several ‘lifebelts’ built into it as standard. We of course hope we’ll never have to use these, but it’s good to know they’re there. Blind optimism with no buoyancy wouldn’t be inadvisable!
In short, we want you to feel reassured that we’re prepared to adapt your plan in line with further market volatility, should that happen. If not, then the lifebelts stay as they are!
If you’d like to chat about this, then please do give us a call.