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Coronavirus and Your Money

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by Brian Dudley, CFP®️

Founder + CEO


03.18.2020     aka the day after St Paddy’s Day

The last thing you want to look at or think about today is your finances, am I right? Or it should have been that way, at least.  Last night, you should have been celebrating after work with a pint of Guinness and some friends, or maybe you went to see a local band with your family (or whatever you typically do on St. Paddy’s day). But, you didn't. You were home, either with family, a loved one, or solo, doing your best social distancing and wondering when life will be back to normal. 

Well, when will it? Soon (hopefully).

The fact is that everywhere you look, there lies the novel coronavirus and its impact on businesses, the economy, and investments. social sites, newsfeeds, and the media are focused on trying to piece together the latest breaking events. In the market, huge swings negative are followed with recoveries, only to be followed by bigger swings lower. The S&P 500 was down nearly 26% heading into Monday's session. Wild times, for sure.

So what do I do with my money? Here are a few tips.

1. Look for opportunities to upgrade your portfolio. There may be companies that you have always wanted to own, but their price was too high. Take a look back at those companies. The past month has caused many individual names to decline even further than the S&P 500. It may be a buying opportunity for long term investors.

2. Review your loans. With the market crash, we have also seen interest rates at levels we haven’t seen in quite some time. Historic lows in rates allow you to reduce the interest you are paying someone else! Although I believe rates will remain low for some time, it may not be a bad time to check this out now.

3. Remember to re-balance. This ties in to the first tip a bit. Market declines create portfolio imbalances . If you now own less stock in your overall allocation,  you will not recover as much when those stocks  eventually rise. For example: Say you had $100,000 invested and $50,000 in cash. If those stocks fell 25%, you now own $75,000 in stock and still have $50,000 in cash. You went from having 67% of your money in stock to 60%.* Realign your portfolio with your goals and make sure you are ready for when the tides turn. 

As always, we are here to help answer any questions that you may have on this or any other topics (both now and beyond). Our team has always been able to run virtual meetings and are available anytime for calls or video conferences. Remember, times of uncertainty bring opportunity for those willing to stay invested. 

I hope you and your families stay safe (and sane), and as always, thank you for your time.

-Brian


*The example provided in tip 3 is for illustration purposes only and does not factor in fees or taxes.