When the pandemic first started, the phrase “unprecedented times” seemed to be everywhere – in every article, video, or announcement – as everyone’s lives were collectively disrupted. “Unprecedented” was, in fact, an accurate term. Unfortunately, it was not the first or last time in our lives that we will face unprecedented times – think about how many unprecedented things we have faced this year alone!
It’s Hard to Think About the Future
Unfortunately, we struggle to anticipate how many unprecedented things are ahead. We can think back over the last five years, with all the change and challenges, and reflect on how we grew and how our lives changed. However, when we think about the next 5 years, we usually guess things will be pretty smooth. (This is called the end of history illusion!) In other words, while the past is full of unprecedented events, we may trick ourselves into thinking that the future is pretty . . . well, precedented.
To be clear, this is not to say that the future is all doom and gloom. But when we’re building our portfolios and making financial decisions, it’s worth considering how many unexpected things may lie ahead. Consider just a few of the changes that may affect your life over the next few years.
- Death in the family
- Birth of a child or grandchild
- Job loss or change
- Raises, promotions
- Unexpected bull or bear market
- Change in one’s work industry
- Real estate price changes
- Set rates at a federal level: Medicaid, Medicare, interest, social security
All of this to say: “precedented times” will probably be few and far between. And that’s okay!
Build Your Portfolio With Change in Mind
When building your portfolio, it may be helpful to consider the unprecedented times ahead. It’s valuable to consider how much risk you are really taking. These are big decisions. Thankfully, they aren’t ones you have to make alone – these are great conversations to have with your financial planner!