The Intoxication of Worst Case Scenarios

April 11, 2022

Advisors do a lot of what-if thinking. Our job is to consider a client’s portfolio and think through the impact of various economic scenarios upon it. More importantly, we think through various possible events in the lives of our clients and design a portfolio to help them reach their goals and deal with emergencies.

 Our clients do a lot of what-if thinking too. In our experience when a client brings up a what-if scenario, it’s normally about negative possibilities… not positive ones. 

  • What if the stock market keeps going down?
  • What if we run out of money?
  • What if a Democrat gets elected and my portfolio drops?
  • What if a Republican gets elected and my portfolio drops?
  • What if we have a solar flare and it knocks out all internet connections and we can’t access our money?
  • What if our national debt destroys the dollar?
  • What if the government raids our 401ks and retirement accounts?
  • What if we go into recession?

 If you’re the kind of person that loves to imagine the worst, let me add one more for your rumination—just for fun:

What if most of your negative what-ifs don’t happen? (In your lifetime at least.)


What if they do happen, but the outcome is more positive and the recovery happens faster than you expect?

The negative impact of not planning and positioning your portfolio for positive outcomes can be massive. 

  • What if US stock market keeps going up over the long term?
  • What if quality of life generally improves globally over the next several decades?
  • What if the economy gets better?
  • What if the United States continues for several hundred more years as a leading global nation?
  • What if a new technology comes out in the next five to ten years and revolutionizes our way of life?
  • What if US companies continue to find a way to make money and generate earnings?

Some of you need to flip your thinking. Shift your what-ifs to positive outcomes.

Hey, at least go 50/50.

If you don’t, you might create your own negative feedback loop and become your own worst enemy of future financial growth. Instead of becoming intoxicated with pessimism by brooding on negative outcomes, give your imagination the elixir of some positive ones too.