67. Don’t Panic: Market Drops and the Bigger Picture

Today, I explain that while a market correction - defined as a 10% or more drop - is never fun, it’s actually quite normal and often healthy. Historically, corrections happen every year or so, and the average recovery time is about four months. I walk through data showing that after 10%, 20%, or even 30% declines, markets tend to rebound strongly over one-, three-, and five-year periods. I stress that trying to time the market doesn’t work - you can’t afford to miss the best days, which often come right after the worst ones. I emphasize that policies like tariffs are temporary and shouldn’t shake our long-term investing strategy. Businesses adapt, markets recover, and the long arc of investing continues upward. For those with excess cash, downturns can be a good time to invest, rebalance, harvest losses, or consider a Roth conversion. I also encourage listeners to reassess their risk tolerance, especially if they’re nearing short-term goals. My main message: zoom out, stay focused on the long term, and remain optimistic - this time is not different.

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Key Takeaways:

• Market corrections are a normal part of investing, not a reason to panic.

• Tariffs and trade tensions may cause short-term market movements, but their long-term impact is often overstated.

• Staying invested through downturns is a key to building wealth and fear-based decisions can derail years of smart investing.

• Corrections can create buying opportunities if you’re positioned wisely.

• Comparing today to past corrections helps put things in perspective.

• Volatility can test your resolve, but staying the course is usually the right call.

Key Timestamps:

(00:00) – Market Corrections: Frequency and Impact

(02:29) – Expected Market Rebounds After Declines

(05:56) – The Importance of Staying Invested

(07:55) – Temporary Nature of Policies

(10:05) – Businesses' Adaptability and Long-Term Outlook

(11:16) – Practical Steps During Market Downturns

(13:52) – Conclusion and Final Thoughts

Key Topics Discussed:

BLUF Veteran Finance Podcast, Military Finance, Veteran Financial Planning, Military Money Management, VA Benefits, Military Retirement Planning, Financial Literacy for Soldiers, Military Budgeting Tips, Debt Management for Service Members, VA Loans, Military Investment Strategies, Saving for Deployment, Thrift Savings Plan (TSP), Transitioning to Civilian Life, Military Tax Benefits, Financial Independence for Veterans, Military Money Manual, The Military Money Show

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More of Baskin Financial Planning:

Download the Ultimate Military Finance Checklist⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠, with 7 pages of critical things to be thinking about to clarify your journey to financial freedom.

Think you might need some financial help? ⁠⁠⁠⁠⁠Book an intro call with me to see if we would be a mutual fit.

Questions or comments, drop me a note at: erik@baskinfp.com

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