| There are options if you feel the need to take action.
The S&P 500 has dropped more than 25 percent since COVID-19 took center stage. Interest rates have been cut to just above zero. Consumer spending—70 percent of the economy—is down. The government is discussing bailout and stimulus packages for Americans and industries.
We’ve been telling you recently to “diversify, stay focused on the long-term and rebalance.” But is that still the right approach for your financial future? I addressed that very question on my radio show, The Ric Edelman Show, this weekend.
Listen to the answer here. Be sure to listen to at least the first segment. And please feel free to share this with friends and family who may need some guidance right now.
My message is simple: If you have ample cash reserves, if your portfolio is well diversified, your outlook remains long-term and you can rebalance your portfolio—you should leave everything as is.
Yet we want to acknowledge that other investment approaches do exist—though our firm does not endorse them. Many of my listeners have told me this crisis has them concerned—and feeling helpless—about their investment strategy. You might be feeling similarly. So, if staying diversified, focused and appropriately balanced doesn’t feel to you like you’re taking action, here are the options I shared on this weekend’s show: - Add to your portfolio. Increase contributions to your retirement plan to take advantage of today’s rare buying opportunity of lower stock prices.
- Shift your portfolio temporarily to a reduced equity position.
- For retirees: reduce or stop monthly withdrawals from your portfolios and use your cash reserves instead for income for the next few months.
Long term, we believe that the stock market will rebound to new all-time highs — even though the markets might be volatile between now and then. In that light, we still believe our fundamental advice is sound. We still advise against pulling out of stocks entirely, and attempting to market-time to get back in.
If you have questions about these methods, or need some reassurance, we are here to help you. One of our local planners can provide you with the investment and financial planning strategies—and sympathetic ear—that you may need right now. Just click here or call: (888) 752-6742.
We wish you good health and safety.
Regards!
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