The New State of our Affairs

“I sang through the summer,” Grasshopper said.
“But now I am glummer, because I’ve no bread.”
“So you sang!” sneered the Ant. “That relieves me.
Now it’s winter–go dance for your bread!”

To prepare for retirement, my wife and I tried to do everything right. Throughout our professional lives, we worked hard, saved and maximized our contributions to our 401K. We took care of our aging parents and planned to avoid becoming a burden to our children when we reached the old age. We eliminated all debt. We resisted impulse buying, whether shopping for small or big things. Even though I could have afforded it, the most expensive bottle of wine I ever bought in a liquor store was about thirty dollars, and the most expensive car we ever purchased was a Toyota Avalon.

Of course, we would have preferred to have guaranteed pensions indexed to inflation and generous enough to ensure a decent standard of living, as it happens in most civilized countries, but that was not in the cards. Consequently, I had and still have to stay actively involved in managing our retirement investments with the help of a competent financial guy. And with financial advisors, like with doctors, once you pick them, you better trust them. Otherwise you are lost.

Over time, and, in spite of my best instincts, I’ve been exposed to the rules of dealing with the stock market. Diversify. Buy mutual funds, not individual stock. Make sure you have some bonds. Define your desired level of risk. Sell high, buy low. Keep some cash to be able not to sell when the market is down. Live on a budget. Monitor your investments. Minimize tax exposure by liquidating positions that are upside down. Don’t react on fear or impulse. Have a plan and, no matter what happens, stick to it.

Easier said than done.

Everybody knows these so-called rules. And everybody has nerves. Right now, it is nerve racking, whether there is a plan or not. The market has dropped about 25% of its value, and it could lose much more. Young people will have time to adjust, but what will we do? Dance?

I read that the stock market is predictive of the future and the economy months ahead. The problem is that right now the future is totally unclear. That’s why the stock market jumps up and down. There are those who say the economy will get back to normal in six to eight weeks. Great! I would welcome that. The one thing that I liked under Trump was the stock market, even though I don’t think it was his merit at all. Then there are those who say that the coronavirus and its nefarious effects will last much longer. They say the recovery is one to two years away. I think of those people as perennial pessimists. ‘Realists,’ my wife calls them. If they are right, the market will go down further, our nest egg will crack and rot. How do I make the right decisions? How do I deal with the stress, the unknown and the unplanned?

When so many other people are losing their jobs or put their lives on the line to do their jobs, when businesses are closing, funerals are attended via Face Time and young children cannot go to school, is my anxiety even an issue?

Day after day, we do as we are told. We social distance, have groceries delivered to the house, wear gloves and masks when we go out and we don’t visit our children. We cancelled all our trips. We stopped having dinners with friends and birthday parties, and I watch a lot of tennis championship reruns and old familiar shows on TV. Yet, as retirees, we now have to worry about our savings being diminished by the slide of the stock market, which is, as my wife says, a glorified ‘crapshoot.’

What did we do to deserve this? Nothing. That old Aesop fable with the ant and the grasshopper comes to mind, although in reverse. In the summer of our lives, we worked like the ant, and now we cannot keep what we saved, even though, unlike the grasshopper, we didn’t sing.

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