It started with good news from Citibank. For the last four days, we’ve watched the market recover. As one strategist put it, “Even if it’s a bear market rally, the good news is the duration.” Are we out of the woods? No one knows, so you need to be smart and stick to your plan, recognizing that now may be an opportunity for you to reset how you think about the economy and investing.

The Great Reset

America’s shrinking economy has shortened everyone’s time horizons. When the Obama administration announced its plans for an $800 billion dollar stimulus package, legislators were on board with spending 75 percent of the money over the next 18 months. But the portions of the bill that are more forward-looking—like long-term investments in education and infrastructure—have proven more controversial. Who can think about laying down train tracks over the next decade when millions more jobs could be derailed by the middle of next year?

Extravagance Has Its Limits as Belt-Tightening Trickles Up

In just the seven months since the stock market began to plummet, the recession has aimed its death ray not just at the credit market, the Dow and Detroit, but at the very ethos of conspicuous consumption. Even those with a regular income are reassessing their spending habits, perhaps for the long term. They are shopping their closets, downscaling their vacations and holding off on trading in their cars. If the race to have the latest fashions and gadgets was like an endless, ever-faster video game, then someone has pushed the reset button.

The Scream of the Lizard

I know that there is a bottom somewhere in front of me, and I know that the relentless tide of bad news will end and I know that at some point in the not-too-distant future, I will look at a graph of the markets and see a blip that started last Fall and ends somewhere, hopefully soon, and it will look as inconsequential and trivial as the October 1987 crash looks today, or the little jiggles that represent the 1930s, and I will wonder why we were all so damn worried.

And I will have forgotten—because we always forget this—that the lizard-like base of our brains sometimes decide to take control, and all our knowledge and all our intelligence is neutralized by a little lump of tissue that has no understanding at all of what’s going on, no perspective, nothing except an “on” switch which, when triggered, activates a complex, instantly powerful native algorithm which screams into our brains and throughout our bodies that there is a saber-toothed tiger right behind us and we should be running for our lives.

Don’t Think of It Like a Bank Account

The biggest problem many people have is they get their quarterly investment statements and think of them in terms of a bank account. Obviously, if you deposited $2,000 in your savings account at the bank only to get your statement a month later and see a lower balance, you’d be pretty upset. That’s because money in the bank is just money. You didn’t buy any assets with that money, and it is just a place to safely put your cash for a later date.

An investment account isn’t the same. You have to remember that you’re actually exchanging your money in return for another asset. In most cases, this means buying shares of a mutual or index fund. The important thing to remind yourself is that if you bought 100 shares of XYZ investment, you still have 100 shares regardless of what your statement says it is currently worth. You have actually purchased something, and in the future you may see the value of your asset change.

Even though your statement shows a loss on paper, think about it in terms of actually owning assets. You still hold shares of your investments, and nobody took those away from you. They have just been temporarily devalued by the market.