Floridians are notoriously chaotic. You might have heard of “Florida man.” This is the mythological Floridian performing newsworthy pieces of insanity.
Yet, as chaotic as Floridians can be, there is a lot to learn from their approach to hurricanes. And those same lessons can help us in our investment portfolios.
Photo by NASA on Unsplash
Hurricanes are a part of life
Long-term Floridians have lived through one or more hurricanes. This experience gives them an advantage over those who are living through their first hurricane season.
Just like hurricanes are seasonal, so too are economic ups and downs. The stock market might not rise and fall in yearly cycles, but it is possible to see the same patterns appearing over time. Those who have lived through recessions in the past will react differently than those whose investments are experiencing their first major downturn.
In Florida, it’s a good idea to pay attention to those who have lived through several storms, and to mimic the steps they take. Just so, when experiencing a financial downturn, it’s a good idea to look to those who know how to weather the storm.
Don’t be scared; be prepared
The most contagious sickness in tough times is panic. It’s easy to spot those who are experiencing their first hurricane, because their immediate reaction is to panic. Floridians who have survived storms in the past know to take a deep breath and carry on.
This is not to say that Floridians don’t react at all to the news that a major storm is approaching. But they take necessary steps with an almost cheerful attitude.
On the eve of Hurricane Ian landing, Floridians took the steps they needed to take: filling sandbags, stocking up on supplies, mentally preparing for loss of the power grid, draining pools, or evacuating. And many Floridians, took these steps with a smile as they “hunkered down.”
Floridians know that hurricanes are not to be underestimated, but blind panic can be just as harmful.
As news organizations start to utter the word “recession,” it’s important to remember this approach to impending peril. You will see some begin to panic and engage in erratic investment behavior.
In the great words of FDR, “There is nothing to fear, but fear itself.”
There are steps you can take to recession-proof your finances, but these steps should be taken rationally, logically. Don’t let blind panic affect your investment decisions.
Support each other
The clean up after hurricanes pass is not a solitary effort. Communities come together to clear the wreckage, to provide housing and supplies for those in need, and to rebuild.
Similarly, we will not come out of a recession on our own.
The best way out of a recession will be by working together.
If you’re curious how to recession-proof your finances, click here to register for a Free Bronze Account. A licensed advisor will reach out to schedule a strategy session with you.