It is probably not unreasonable to say that many of us don’t like disruption. We are conditioned to normality. We like routine. We like to know that that the Sun rises in the East and sets in the West.
And when our routines are changed, many of us will want to find a safe place to hide. Put another way, when faced with a choice of fight or flight, many of us will choose the latter. We can’t help it because that is the way that our brains are hardwired.
Right now, there is tremendous uncertainty in the world. It is making life very uncomfortable for many of us. Who can possibly know when and how the Sino-US trade war will be resolved? Who has any idea which rabbit hole an unpredictable UK prime minister will lead his public down?
And what about Hong Kong? What indeed? What has happened to the secret sauce of Hong Kong’s success, namely, a laissez faire administration? How did the Hong Kong Government manage to get itself into such a mess? Did it honestly believe that it could hoodwink Hongkongers by sneaking through a dangerous extradition treaty with China?
It is little wonder that investors are running scared. The US$14 trillion that has been parked in negative-yielding bonds is a good testament of that. It is quite bizarre to even think that people will put their money into something that is guaranteed to return less than they invested.
But fear can make people do things that they would otherwise not even consider. That is why we must learn to control our emotions – even in these difficult times. If we can can’t control our emotions, then it can be very hard for us to control our money.
We need to stay focussed on the long term. We must not be distracted from our financial goals. For me, it is achieving financial adequacy when I decide to stop work. That might be your objective, too. That means we must invest normally, even in abnormal times.
A version of this article first appeared in Stock Advisor.
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