Do you worry what is ahead for the American economy in the aftermath of the COVID-19 shutdown? Do you wonder if your 403(b) account will recover fast enough to help fund the retirement you dreamed of?

MORE than 30 million people have lost their jobs in the six-week period ending April 25! Oil prices collapsed, because of a world glut due to a lack of demand. As this post is written, the price of West Texas Intermediate crude has risen 22.44% today, but the price is still well below $20 per barrel. When people are told businesses can resume, will people want to go out? Will people want to spend? Will states whose budgets are deeply out of balance go bankrupt?

How long will it take for the American economy to recover? Will a graph of the recovery look like a U with a long time between the downward and upward leg? Will it be a snapback like a V? Will there be several upward and downward turns that eventually look like a W? The economic consequences for the average American will be as divergent as the images mentioned.

Lawrence Kudlow, the Director of the United States National Economic Council, has stated that the economy will have 17%-20% growth in the third quarter of 2020. The US Federal Reserve Chairman, Jerome Powell, said a “W-shaped recovery may be too optimistic.” Some economic forecasters predict graphing the recovery that will look more like the famous “swoosh” of Nike.

The best answer is, “No one really knows how the recovery will take place.” Those trained in economics can build models and make projections. However, projections and predictions are opinions. Some opinions may be based upon greater experience, but those who opine have likely never faced a recession that had no roots in the economy.

A better way to focus our energy may be to focus upon the question of, “How do we best respond to the current circumstances?”

  • Understand why the financial markets collapsed as they did, and why they have bounced back as of today. The financial markets always look to the future. The markets dropped because many looked ahead and expected 30 million people to lose their jobs. Stock prices dropped in early March to reflect the economy that has happened in the last few weeks. The markets began to recover while unemployment kept increasing, because investors were again looking to the future and the beginning of a recovery.
  • Expect more volatility in the future. Market volatility is driven by economic uncertainty, and we have that in abundance. Congress acted to provide assistance to small business owners who lost their customer base for no other reason than governmental action. No one knows if the actions of Congress and the Federal Reserve will be sufficient.
  • Do not make drastic decisions when emotions are telling you to sell (or buy). We regularly hear individuals claim that they were smart enough (or their advisor’s timing program was good enough) to sell everything in February. If someone did, it is normally blind luck. Bear markets are opportunities to buy shares in good companies that should be held for a lifetime.
  • Take advantage of this time to examine how you have been spending your funds. Almost everyone falls victim to creeping affluency. We tend to spend a little more when consumer confidence is higher. Those who can reassess their spending patterns and find areas to cut back, will make their future more stable.
  • Focus on God’s blessings. Sometimes those can be hard to find, but they are there. We have friends who are experiencing life threatening diseases and some whose life in ministry has been cut short due to disability. Many times, these very individuals become points of inspiration as they continue to talk about the goodness of God and His Word. List the blessings. Thank God for them daily. Tell others about them.

Yes, the times are uncertain. Yes, there has not been an economic situation caused by a virus before. But this is not a time to panic.

Here is to the time when we can fully pursue our passions and live financially free!