The recent historic events in the financial markets are unprecedented and, to many investors, unnerving. For many, it is tempting to “sell everything.” Making significant financial decisions during times of emotional duress (either fear or greed) almost always turns out badly. More productive is the advice given by Rudyard Kipling, “Keep your head while those about you are losing theirs.”

First, and foremost, take some time to remember your long-term plan and don’t put yourself in a position where you have to sell stock when the market is down. One of the most important factors to consider is your investment planning horizon. For most people, 5 to 10 years is a reasonable planning period, even for people who are retired. You won’t spend all of the money in your investment account immediately. Rather, you will likely spend a fairly small percentage each year.

Based on 5-year planning periods the stock market has produced positive returns (including dividend income) 87% of the time. Over 10-year planning periods that percentage rises to 98%! Nobody can guarantee that the stock market will go up, but that has certainly been true over periods long enough to encompass a normal business cycle. The rise in share prices is a reflection of the long-term growth in the economy. While there are plenty of things to worry about today, we believe both the U.S. and the global economy will expand over the next several years.

Second, one must diversify – That statement has never been more true than in the current market environment. Stocks may be volatile over the coming weeks or months but putting everything in cash will probably lose ground to inflation. If we get deflation, rather than inflation, then long-term U.S. Treasury bonds would be the asset of choice. We could give many other examples but the key point is that no single investment can hedge all of the investment risks in the financial markets.

Think about the challenges that have confronted our nation in the past. We had the depression of the 1930s; World War II in the 1940s; the beginning of the Cold War in the 1950s; Vietnam, Nixon and Carter and inflation in the 1960s and 1970s; a stock market crash and S&L crisis in the 1980s and the Gulf War in the 1990s. Finally we have had the bursting of the tech and real estate bubbles in the 2000s. Through all of this our economy has grown and stock prices have appreciated. The path has not always been smooth but the trend is undeniable.

We have no doubt that America and its people will work through the current serious crisis. Through all of this we will do what we have always done, remain focused on risks as well as opportunities and adapt our strategies as market and economic conditions warrant.