All of us have a wee little piece of our brain that has more in common with the animal kingdom than it does with the hallowed halls of Oxford or Cambridge.  It’s called the amygdala, or in terms that those of us without a medical degree can relate to – lizard brain.

In times like these, why is this relevant?  Because that little gland controls our ability to stay calm in a crisis and influences our decision-making abilities. So, when the news and social media are screaming at you to panic, we need to calm our lizard brains and make smart decisions.

Have we been here before – sure have.  I’m pulling some of this text from my blog nearly exactly five years ago.  At that time, the Dow was 20,087 and it’s now hovering around 42,060 which means that while we may have recently seen a 4.45% drop, this is simply a shaving off the 109% increase we’ve seen since March 2020.

To put things in perspective, the market dropped 35% during the 1987 correction, 36% during the 2000-2001 episode and a healthy 51.9% during the 2007-2009 correction.  I was right there for all of them and trust me, that pain was vodka-swilling real, not the fuzzy whoa-is-me sort of pain we have now.

What’s inflaming that lizard we harbour?  Many of the news feeds are throwing around terms like “recession” and “correction” which is the equivalent of throwing chickens to the alligators so let’s put some definitions to those terms.  A “recession” is two consecutive quarters of economic decline.  We really can’t even use that term until at least July.  A “correction” is a market decline of at least 10% and we’ve a ways to go before that’s a reality.

The fact is, we’ve had a lot of recessions (at least 32 in the last 160 years) and it isn’t something to fear.  Think of it this way:  what better way to get back in touch with what’s important to you cash flow wise?  If you’ve been spending a bit like a drunken sailor, use this baby market movement to bring some mindfulness back to your spending habits.  If you’ve been ignoring your portfolio, perhaps now is the time to revisit it and think about ways to re-align your allocation with your goals.  If you’ve been cruising thinking that you could never lose your job, use this as a wake-up call to build a “what-if” strategy.

And back to our lizard brains – for many of us, that little gland is working overtime to distract you from taking logical steps to evaluate your situations.  It’s whispering “Run, Hide, Flip-Out” because that’s how survival was done eons ago when the cheetah was looking at us like we were lunch.  Our job now is to “Stand firm, Evaluate, Take Appropriate Action” so the cheetah walks away hungry.