The past couple of weeks have been a wild ride. There is fear out there; people are starting to feel sick. If this person is you - it is OK to feel that way. This is what comes with volatility and massive sell-offs. We've been through these times before and none of them have felt good. Naturally clients will ask - what do we do? Here are some of my personal takes on the market and current environment to address that question:
- Bonds are critical to offset volatility - I'm not suggesting bonds won't ever lose value as well; however they have done their job over the past couple of weeks as they haven't sold off to nearly the level which stocks have.
- Being all-in or all-out is not a sound strategy - no one can predict when the market peaks or when the dust settles after large sell-offs or recessions.
- Do not throw out your long-term plan - studies show that missing out on just a hand full of the best positive days in the market can have a damaging impact to your wealth, and these "best days" are often mixed in with these periods of panic selling.
- Re-asses your situation - if your circumstances have changed (financially, psychologically, etc) then it is important we have a conversation because it may be appropriate, or even necessary, to make changes.
- There are opportunities - if appropriate for your situation consider increasing retirement contributions, making your 2020 (or 2019) IRA contributions, converting (partially) to a Roth IRA, making 529 contributions, or harvesting tax-losses.
- No one knows what is going to happen - coronavirus headlines, and now oil price wars, are driving this environment of fear and speculation and in these times it is important to discuss how you're feeling and we am here to listen - please feel free to call or email us.