We have all seen the craziness in the markets. We’ve felt the anxiety surrounding the short- and long-term fallout during the coronavirus pandemic that turned our lives upside down, seemingly overnight.
As your wealth management team – whether we provide you guidance through your investment vehicles, financial plans, retirement accounts or other services – we want to offer you reassurance and assistance today, and moving forward.
An Update from Bell Bank
In times of uncertainty and stress, we often feel the urge to do something – anything. That’s never more true than when you’re looking at financial disruption, lost income and livelihoods, and accounts whose value has ebbed from its high tide.
Now is a time to reflect and reassess, and your Bell advisors are here as a sounding board and resource for you. Reach out with your concerns before making big decisions in your portfolio or personal finances.
Our advice to you now is threefold:
- Dig into your budget, debt and cash flow if needed
- Focus on your cash reserves
- Stay invested for the long term
What to Do If Your Household Income Is Affected
Considering the level of disruption in our everyday lives and local economies, many households have been affected financially. You may have been laid off or face uncertainty about your future income.
To make the most of our urge to do something, we encourage you to take this time to dig into your budget, balance sheet, and cash flow.
- Look at where your money is going and make changes to your budget and expenses.
- If you're like most Americans who have minimal emergency savings, begin adjusting your budget now to best manage your ongoing expenses.
- If your income in the coming months won't be enough, look at where you can access cash to bridge the gap — emergency savings, home equity line of credit, a low-interest personal loan, investments, and as a last resort, peer-to-peer lending or credit cards. Even in dire situations, we never advise doing a short-term payday loan. Your bank, your trusted advisors, and friends or family are the best places to start when looking to borrow.
- With reduced interest rates, look at options for refinancing a home equity line of credit or mortgage.
- There may be elements of the stimulus funds that can help you – student loan relief, checks for you and your family, or Small Business Association (SBA) aid to your business.
Focus on Your Cash Reserves
If you have a financial advisor or have experienced the Dave Ramsey “SmartDollar” program, you likely have an emergency fund of 3 to 6 months’ expenses in the bank. These are the ‘rainy days’ that those dollars are for. It’s a great relief to have cash on hand when you need it.
If you need to build cash reserves, remember every dollar counts. Consider the small wins of redirecting dollars intended for travel or leisure as giving you breathing room to save.
Don’t forget tax refunds. Although the IRS has extended the deadline for filing and paying taxes to July 15, if you will be receiving a refund, don’t wait. File now and hold this in your savings. While many states have followed suit on the extension, confirm with your tax advisor if you wait. Also, the recent stimulus package is tied through the IRS to your Social Security number using your 2019 taxes if you’ve filed, 2018 if not, and can be directly deposited if you’ve opted for that in your tax return.
It’s been a wild ride in the markets this year, and the ups and downs will continue as the globe works its way through this pandemic. For perspectives on the markets, check in monthly to hear the Economic Outlook from Greg Sweeney, Bell’s chief investment officer.
Even the best money managers can’t “time the markets” by jumping in and out of investments. If your emotions are taking over, consider the old saying, “buy low, sell high.” Selling now is actually the opposite. Continuing to make contributions and investments at these lows is wise. Before taking action, reflect on your long term plan and contact your advisor.
If you are nearing retirement, you likely aren’t fully exposed to the stock market and aren’t experiencing the dramatic swings noted in financial media. If you won’t be living on the funds for 10 or more years, you may be invested more aggressively, but you also will have more time and more market cycles to experience and see your investments recover.
We’re Here for You
We appreciate the trust you have placed in us. Remember, reach out to your advisor before you make decisions about your investment portfolio, your retirement plan, or your personal finances. Financial plans and investments are designed to achieve long-term financial goals. We would like to help you take the long view right now, so contact your Bell wealth management expert.
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