DON’T MAKE FINANCIAL DECISIONS OUT OF FEAR

Financial Professionals Inc. was incorporated in 1994. During that time, we have faced a lot of situations that have created fear and uncertainty; Y2K, Terrorist Attacks on 9-11, the stock market crash in 2008, just to name a few. In each case there were people who made decisions based on fear. When we do that, it usually doesn’t work out well. Today we find ourselves in the midst of fear and uncertainty caused by a worldwide pandemic along with an extremely divided government and political system. If history tells us anything, it is that “This too will pass.”

Most of us can’t wait to put 2020 behind us. It was a horrible year with fears of the virus, lockdowns, business failures, layoffs, medical testing, etc. It is important to point out that on January 2, 2020 the Dow Jones Industrial Avg. was at 28,868.  After we discovered we had a pandemic, the Dow dropped -35.6% to 18,591 on March 23rd. It is at times like this that some people get scared and sell their investments. However, by December 31, 2020 the Dow had rebounded +64.6% to 30,606. What a tragedy it would be for those who sold their holdings in March.

There are many great companies in our portfolios that have been around for decades. They provide needed products and services to our country and to the world. Although anything could happen, most would agree it is unlikely that APPLE will go out of business anytime soon. The same is true with Walmart, Amazon, Exxon, and many others. These essential businesses are likely to weather the storms of uncertainty, because we need the goods and services they provide to live our lives.  At Financial Professionals, Inc. we also diversify our investments by spreading our portfolios across hundreds of great companies. That way if a company does fail, it will help minimize the effect on our client’s portfolios.

At Financial Professionals, Inc. we do our best to help our clients build portfolios that will weather the storms of uncertainty. We also help our clients plan to maintain reachable income during downturns, so they don’t have to sell holdings at a bad time. Don’t hesitate to call if you need us.

Source: Yahoo Finance Historical Data