It might be difficult to have an optimistic attitude about a post-pandemic future when there’s so much uncertainty. It can be hard to keep a positive viewpoint during tough times; our brains are naturally programmed to remember negative experiences in more detail than positive ones. Psychologists call this negativity bias. But like most Americans who report feeling upbeat about their finances in 2021, we don’t believe it’s all doom and gloom. Let’s shift our perspective and look at the world through an optimistic lens.
Here are four reasons to be optimistic about our money in 2021 and beyond.
Stocks Enter 2021 at Record Highs
2020 was full of surprises when it came to the stock market. In just 33 days, during February and March, we saw the fastest-ever drop from a bull market into a bear market. The stock market rebounded in Q2 and Q3 and hit record highs in Q4.
This reminds us of the theme song from the 1980s sitcom, The Facts of Life: “You take the good, you take the bad, you take them both and there you have the facts of life, the facts of life.”
Market ups and downs are a fact of life. When we see the stock market tumble, our first reaction might be to check our portfolio to see how much we’ve lost. A drop could actually be a good thing for those retiring in 10 or more years. When the market is down, you are buying stocks at a cheaper price as you continue contributing money to your 401(k).
The hardest part about investing is our own mindset. Many people think investing is about percentages and returns. But when times are most challenging, we need to remember our goals and our plan to reach them. Talking about dreams and setting goals is the first step we take to help our clients feel confident in their financial future.
COVID-19 Vaccine Rollout
COVID-19 has impacted both our health and our personal finances. A vaccine could help restore our faith in the economy. Businesses will open back up, and people will feel more comfortable traveling, going to the movies, sporting events and museums. In turn, they will start spending money and hopefully return to work, which will reduce unemployment all while improving our health and the economy. The United States can’t mandate COVID-19 vaccines. Ultimately, getting vaccinated is a personal choice, but it can be viewed as a way to stop the spread of this deadly disease and keep businesses open, which will reactivate the economy.
Vaccine research and technology is also another reason to be optimistic. Scientists were able to cut off years of normal development and create a vaccine in less than a year. The discoveries may be used to fight other pandemics or diseases, like cancer.
Interest Rates are Low
The Federal Reserve is holding interest rates near zero in hopes to preserve the flow of credit until the economy recovers. What the Fed does impacts the borrowing and saving rates consumers see every day.
One example is credit card rates, which are near a four-year low. Take advantage of what the Fed is doing by comparing rates from different lenders to find the best deal.
Home mortgage rates are expected to stay low, making home ownership more affordable.
Having the power to purchase a home can help the economy by driving up demand for housing, home improvements and purchases. Homeowners are also taking advantage of the record-low interest rates by refinancing. We aren’t sure how long these low interest rates will last, but they could stay low for the foreseeable future. If purchasing a home or refinancing is your goal, it may be time to act now.
Focus on What You Can Control
There are things in this world we cannot control, and some people have a difficult time dealing with uncertainty. But the power of optimism is in your control. It doesn’t mean you ignore challenges, but instead, you’re proactive and prepare for them. You can take steps now to put yourself in the best financial position possible. At Zephyrus Financial Services, we believe the way to accomplish this is by having a customized financial roadmap. This roadmap is unique to you and will outline how your money will work for you to sustain your lifestyle during retirement. A roadmap gets you to a spot where you can reach your goals, but most importantly, stop stressing out about your money.
If you would like more information about how we can create your customized financial roadmap, make an appointment with us directly through our website. Click here to make an appointment today.