Here Are Some Investing Thoughts For The Scary Coronavirus Market

Covid-19 has wreaked havoc on the nation’s health and happiness, as well as wealth and financial wellbeing. Whatever type of investor you are, you’re probably wondering what you should do – or not do – to counteract the effects of the virus on the market and your portfolio. Here are five strategies that can help you feel better about your finances while keeping your health the top priority…

Don’t Panic

Chris Kampitsis, a financial planner with The SKG Team at Barnum Financial Group, says, “Investing for the long-term is a funny thing. We often know we won’t touch our funds for many years, but when current events concern us, we often react somewhat irrationally and try to change our long-term savings strategies.” He discourages altering saving strategies as a reaction to unexpected, significant shifts in the market. When stock prices are severely discounted, such a change can represent a significant long-term, wealth-building opportunity for investors to snag shares throughout the downturn.

Talk To Your Financial Adviser

If you have a financial planner, call them for advice. No financial advisor? Read up on financial planning and retirement accounts, or consult with family or friends that have experience with investing. A general rule of thumb: don’t do anything rash. Focus your efforts on being strategic and disciplined with regards to your investing choices, and remember that when the market is volatile, sometimes the best course of action is no action at all.

Try To Resist The Urge To Withdraw Cash

You’re tempted to take your money and run – but don’t do it. Robert Forrest, a financial advisor with RBC Wealth Management in Nebraska, offers the following advice: “If you’re in the drawdown phase of investing, we hope you’ve been set up with an investment portfolio that is focused on income — dividends, bonds and so on,” Forrest says. “As a general principle, when drawing down investments, withdraw as little as possible from your accounts while values are down. Pulling money while your accounts are down compounds the impact of the down market on your retirement.”

Rethink Rebalancing

If you’ve been rebalancing, stay on the same course. Perhaps the stock portion of your portfolio has plunged or flipped. For example, if your investments are usually a 60% stock to 40% bond portfolio, you may now have 40% stocks to 60% bonds. Take the time to redistribute your risk. Says Kampitsis, “Rebalancing here, with the long-term view in mind, might enable you to purchase additional shares of equities at low valuations and bring your portfolio back to your intended ratios.”

Keep Investing

“If you’re in the accumulation phase of investing, don’t stop accumulating,” advises Forrest. “Yes, it hurts, but if you’re consistently dollar-cost-averaging into a down market like this, you’re buying when stocks are cheap. Your present self won’t be comfortable, but your future self will thank you. You are investing the same amount of money right now, but you’re buying a higher quantity. The quality of the S&P 500 hasn’t gone down, but its price has. Take advantage.”