It is undeniable—we are in stressful times. But our economy has been tested before and has recovered.

No one wants to lose money on their investments. Some want to go as far as to not ask where or how but seek a false sense of security (the recent Bernie Madoff scandal). The reality is our economy is complicated, affected by world factors and will decline periodically. I’m like you—I would like my review meetings to always be a “report” of how much client investments have increased that quarter. But I know better. That is not only unrealistic, it is not economically healthy.

The securities and real estate markets may feel like they are crumbling, but perceiving this as an opportunity to take smaller bricks and begin to rebuild may lead to your personal financial recovery as well as our nation’s.

Financial strength can start at home. Debt can keep you down. If you have a rainy-day fund, rethink—is it enough to cover living expenses for a length of time needed to find a job in today’s employment market? Scale back your lifestyle today. This will increase  your reserves in preparation for a possible job or income loss. Save for desired purchases instead of using credit.

A panic sell-off of your investments after they have suffered a decline is just “locking in” losses that you can’t recover if your money is in cash. If your investment horizon is long-term, (brace yourself) maintain tolerance and maintain perspective so you can participate in market gains when they come back. Even if you are retired, historical data shows cash investments cannot sustain your retirement income stream for long. Compromise with money you may have taken out of the market by investing back in over time, quarterly for example.

Research of the past two decades shows investors too frequently buy and sell at sub-optimal times. The end result was investors averaged a 4.48 percent return when the S&P 500 Index returned 11.81 percent. Some have the mindset in bad markets to think they’ll wait until it gets better. Consequently, they end up getting back in the market after a gain has taken place.

Do review your investment policy statement to see if it is still risk appropriate for you, then check to see if your asset allocation percentage mix needs to be rebalanced. If you do not have one, now is a perfect time. If your life expectancy is 20 years or more, maintain a long-term perspective with at least a portion of your investments. If you are comfortable caring for a piece of investment real estate, then look for some deals but avoid going into debt.

Whether the news comes from the media or Internet it does provide us information, but it can be sensationalized and not always verifi able. Use your best judgment regarding investment news.

Our great country and our personal accomplishments came about from our “AQ” not our “IQ.” Think about it. Truly, was it not our resilience to the “Adversity Quotient” rather than purely intelligence? Events, we can not always control, but our personal responses we can.

It is undeniable—we are in stressful times. But our economy has been tested before and has recovered. In fact we have had seven recessions since 1957. If the last 82 years  (since 1926) of overall market growth is any indicator, is there really a bad time to start investing?

by Erin Carper, CFP ®

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Erin Carper, CFPâ is the owner of Carper Wealth Management. Call  770.781.2502 or e-mail erin@carperwealthmanagement.com,  www.carperwealthmanagement.com

Erin is an Ameritas Investment Corp. (AIC) Investment Advisor  Representative. Securities and financial planning offered through AIC, Member FINRA/SIPC. AIC and Carper Wealth Management are not affiliated. The above information is intended to provide general information. It is not intended as, nor may be considered, as tax or other legal advice for you. Please consult the appropriate professional advisor for your specific circumstances.