Managing Your Investments Through The Coronavirus Pandemic
First and foremost, I hope you are all safe and healthy – especially those of you working on the front lines. I hope those who’ve been laid off or had their hours reduced get the support they need from the federal emergency response benefits.
As Warren Buffett once said, "we have no idea -- and never have had -- whether the market is going to go up, down, or sideways in the near- or intermediate-term future". What we know is that there's a lot of fear right now. Our lives are changing rapidly. Our plans and schedules and some of our most basic routines all feel like they’re changing on us by the hour. This is certainly a difficult, strange, and unprecedented time to be alive.
So, what do we do with our investments when the economy is slowing or in a recession, which typically causes riskier assets like stocks to decline? The short answer to the question is probably nothing. If you’re buying stocks regularly, you can probably continue and weather this panic fine. If you were already planning to shift money into a high-yield savings investment, then stick to your plan. The furor over this coronavirus may end as quickly as it began, though it remains to be seen. Still, if you feel compelled to do something, the smartest decision may be to look for stocks that have been beaten down too much and snap up bargains when they arise.
The point that I'm making is that you should not let this "epidemic" be wasted. All you need to do is follow some simple guidelines to make it through.
1. Give your investment time
First of all, don’t make any rash moves because of the growing chatter about recession or any wild gyrations on the stock market. If you have a solid investment plan in place, stick to it and ignore the noise. If you can, keep contributing to your accounts. If you can’t, that’s OK. Give yourself some flexibility to change your savings approach as your situation dictates, but make sure to revisit when circumstances settle.
2. Focus on your long-term goals
Your portfolio should always align with your financial goals, time horizon and risk tolerance. Always keep in mind your overall investment plan and focus on the long-term goals of your portfolio. Consistency is the only currency that matters.
3. Reach out to someone you trust or speak to your independent financial adviser
Step away from the news, the internet headlines, and anything that is unnecessarily alarming, but do find the sources, like your financial advisor, that you can trust to stay informed via the internet. Your advisor can recommend adjustments to support your current goals and provide personalized financial advice for new goals.
Remember, you won’t make perfect, linear progress toward achieving any of your financial goals, but the important thing is not to be perfect but to be consistent. Don’t beat yourself up. In the process, you will find that both the small things you do on a daily and monthly basis and the large things you do every year and over the decades will help you achieve your financial goals.
Let’s share and help each other through these times.
Your portfolio should always align with your financial goals, time horizon and risk tolerance. Always keep in mind your overall investment plan and focus on the long-term goals of your portfolio. Consistency is the only currency that matters.
3. Reach out to someone you trust or speak to your independent financial adviser
Step away from the news, the internet headlines, and anything that is unnecessarily alarming, but do find the sources, like your financial advisor, that you can trust to stay informed via the internet. Your advisor can recommend adjustments to support your current goals and provide personalized financial advice for new goals.
Remember, you won’t make perfect, linear progress toward achieving any of your financial goals, but the important thing is not to be perfect but to be consistent. Don’t beat yourself up. In the process, you will find that both the small things you do on a daily and monthly basis and the large things you do every year and over the decades will help you achieve your financial goals.
Let’s share and help each other through these times.
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