- In the midst of Coronavirus fears, stock markets have dropped globally.
- While it’s important to be cautious, it’s critical to maintain perspective.
- Current market dips and lower interest rates may be creating investment opportunities that could help you in retirement.
- Always keep in mind, you can’t control the markets, but you can control how you invest in them.
As concerns about the Coronavirus (COVID-19) remain high, so does the uncertainty about the full impact on our healthcare systems, the global workforce and financial markets. In fact, our research partners believe the global economy could be in recession by late spring if the US has a slowdown like China’s. That’s why, if you’re planning to retire—or about to—it’s critical to manage your portfolio accordingly. Find out how in our recent edition of Modern Retirement Monthly: Portfolio management and black swans .
First, our research partners recommend maintaining perspective. Remember that while you can’t control the markets, you can control how you invest in them. Don’t panic, and if you have a “fire drill” plan for responding to market declines, you may want to consider implementing it. Common actions might include rebalancing, putting “dry powder” cash to work and tax loss harvesting when possible.
Second, we can help you organize your financial life into three key strategies: Liquidity—to help provide cash flow for short-term expenses, Longevity—for longer-term needs and Legacy—for needs that go beyond your own. This framework can give you the confidence to pursue what matters most—no matter what the markets are doing. In fact, it’s during sell-offs like these that having 2-5 years of expenses saved in a Liquidity strategy may make sense.
Third, keep your eye on the big picture. 2020 will bring challenges, but there will also be opportunities. For example, the current decline in interest rates presents a future challenge for investment portfolios, but also an opportunity for those who are considering refinancing mortgages and other debt. With a well-built portfolio and financial plan, you’ll feel confident about facing market volatility—as well as know when to act and when not to.