A recent article in our local newspaper provided some interesting insights into bee stings. According to a beekeeper quoted in the article, “It’s hard to stay calm when stung, but that’s the best response.”
The article then goes on to discuss how best to remove a bee’s stinger in the event that you do get stung. It turns out that squeezing or crushing the stinger can inject toxins in the poison sac that is attached to the top of the stinger. In addition, this squeezing or crushing action also increases the chance that other bees will track “alarm” chemicals released in the first sting and prompt a second wave of bee sting attacks. In other words, an instinctive reaction can actually make things significantly worse.
Beekeepers know that they will get stung as part of their job and have traditionally used smoke to mask these alarm chemicals so that they don’t make things worse for themselves.
Investors know that our portfolios are going to get stung from time to time; it’s simply one of those things that has always happened and always will. The key is to have a mechanism to not make this initial problem worse. We should also have our own “beekeeper’s smoke” to shield us from the fear inducing content that typically attempts to get us to mobilize and head for the hills.
In summary, in the event of a portfolio sting, remain calm, try not to make things worse, and develop your own beekeeper-like smoke to shelter you from the alarm chemicals you’re likely to encounter. If you’d like to learn more about how an independent financial advisor can help you with your investments and a host of other financial planning activities, feel free to contact us or visit our website at http://www.woodwardadvisors.com/