Now is not the time for uncertainty. The government has advised extra precautions to protect our physical health, but what about our financial health? Though things may seem unsure, there are ways to bring stability in your finances. For details, check out the Social Distancing Your Emotions From the Economy article below.
At market close today, March 19, 2020, Dow Jones, S&P 500, and NASDAQ all saw increases. The Dow rose by 0.95% with a 189.43 point increase, while the S&P 500 surged by 0.44% with a 11.44 point increase, and the NASDAQ jumped by 2.30% with a 160.73 point increase.
If you would like clarity on how the current market is affecting you, an in-depth market recovery strategy session, or just someone to talk to through this concerning time, click the button below to schedule a time to virtually chat.
Social Distancing Your Emotions in this Economy
Over the past two weeks, it seems that COVID-19 has gone from “just a virus” to shutting down the world. Many of us are practicing social distancing and the market seems to be doing the same to what was once considered a the prosperous economy. While it is tempting to take irrational action, or worse, be completely paralyzed and do nothing, try these 7 steps to create some order during this chaotic time.
Many of us have not lived through a crisis like this causing many of us to essentially wing it. It is tempting to freak out every time the market declines, but remember the reason you started investing in the first place. To build up your retirement funds, reach your financial goals, or create a legacy for your children or grandchildren. To see your hard earned investments drop is frustrating, but unless you need the funds immediately, keep in mind the market has always recovered thus far.
02. Take inventory
Review the necessities in your household and decide what you truly need and when you need it. To better support yourself, your family, and your community, plan ahead. Try making a meal plan for the next two weeks and determine what ingredients you’ll need. Ensure you have enough self-care and cleaning products, but do not over-stock. As seen in the past few weeks, over-buying hurts the community and economy. Refrain from buying non-necessities. Remember, online retailers such as Amazon are still offering grocery delivery.
03. Lower your expenditures.
Part of planning for the future is budgeting, saving, and prioritizing needs over wants. This is an ideal time to start or revisit this while many of us are staying at home. Be meticulous and leave nothing out. Estimate what you would need over the course of a few weeks/months/years. The farther out you plan, the better, as you can predict when you’re going to need your retirement money and ways you can save if you will need more.
04. Save as much as possible!
As tempting as it is, avoid take-out food. Unless your focused on supporting local businesses, cook at home to avoid overspending on food and the current health risks associated with ordering out. Turn cooking into a fun family activity or quality “you” time by listening to a podcast or audiobook. Consider pausing or canceling subscriptions you don’t need. Contribute that saved money to an emergency fund. THIS IS NOT EASY but can help you control your expenses for the near and far future! Once things have settled down, you can use part or all of the extra savings for a vacation, save it, or put it into an investment vehicle!
05. Take stock in where you’re positioned.
Though this may be frightening, we’ve entered a bear market. With the proper tools and planning, your portfolio should be able to bounce back. Does your current position still reflect your realistic goals and proper risk tolerance? Many investors recently learned the hard way that what they thought was an acceptable amount of risk was far too high and ambitious causing their portfolio to look unstable with the current market volatility. Decide what your next course of action will be by devising a personal market recovery strategy. Get your notebook out and start jotting down what steps you may want to take in order to bring your portfolio back up. Estimate the recovery time. You might not have a concrete answer but determining a recovery timeframe can keep you motivated and prevent irrational choices.
06. Devise a plan.
Devise a plan for AFTER you recover some, most, or all the losses. Start this crucial step by remembering the purpose of your investment. Create a step by step plan for each potential outcome (some, most, and full recovery). Include as much detail as possible to hold yourself accountable and make up for any potential gaps as necessary. Do as much homework as possible. Plans and strategies are generally more effective than simply hoping it will work out.
07. Get a second opinion.
Unless you’re a financial professional, designing your own market resistant and market recovery plans may be difficult. You won’t want to miss any steps, which is why seeking the advice of a professional is also important. Look for professional opinions from experienced advisors. A fiduciary may be your best bet for unbiased opinions on your strategy. That way you’ll know they have your best interest in mind when reviewing your plan. These professionals may also have industry secrets and tips you didn’t know were possible or even existed.
The most beneficial thing you can do for yourself right now is creating a written plan. By creating something concrete, you can hold yourself accountable. We can hold anything in our head, but if we don’t write it down and put it out there, how can we be responsible? Having a tangible plan to reference during tough market times is the best thing you can do for yourself.
When it comes time for the second opinion, RGA is here to help. As a proud fiduciary, we’ve offered FREE second opinion services for over 20 years and counting. When we meet, our team reviews your plan, goals, and risk tolerance to asses the accuracy of your plan compared to your needs. We then provide in-depth analyses along with proposals to better your plan, if necessary. Just because the world around you is taking a pause, doesn’t mean your finances need to. In lieu of this, we’re offering virtual second opinions via video or phone calls. Call 1-800-467-8152 or email email@example.com to choose a time to chat.
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