• Brock Williamson, CFP®

Top 10 Financial Planning and Investment Opportunities To Consider Now!

1. Don’t Panic! Fear is not your friend--especially as an investor. Fear causes the worst decision making, including selling at low prices. This is the opposite of what we should do as disciplined, long-term investors. As Warren Buffett has famously stated, “Be fearful when others are greedy, and be greedy only when others are fearful.”

2. Buy on the Dips: This is one of the most proven long-term strategies. When the market goes down, purchase more shares. The markets and economy have historically recovered from every pandemic, war, recession, and crises that we have faced. This time is no different. We will beat coronavirus; the only question is when. I am more optimistic that the “when” is getting closer with each passing day.

3. Roth Conversions/Contributions: Roth accounts grow tax-free and distribute tax-free. Contributions at low points (like the current market conditions) can lead to significant tax-free wealth down the road. Also, conversions from an IRA into a Roth are beneficial at these low prices. Move from the IRA at lows, pay less taxes on it, and then let the bounce-back happen in the Roth where it is tax-free. My guess is taxes are going up in future years. This is a tremendous opportunity to take an IRA (forever taxable) and turn it to (forever tax-free).

4. Risk Management and Diversification: We have factored this type of event into your financial plan. Our financial planning software Riskalyze takes into account these financial shocks, including the recent market fall, into retirement income projections. For clients that have taken our advice on asset allocation and investments, this downturn will not change the long-term outcome.

5. Tax-loss Harvesting: This another way to turn lemons into lemonade. In taxable accounts, we can realize losses to offset any current taxable gains or future gains. You are allowed $3,000 of tax loss carryforwards to reduce income every year.

6. Increase 401k contributions (Front Load): If you have a work retirement plan, consider maxing out your contribution. Front load it and pay more into it now while prices are low.

7. Emergency Fund/Financial Plan: We have always recommend having 6 to 12 months of cash as an emergency fund. This money in the bank should provide enough cash liquidity to help you weather financial storms without taking distributions from accounts while they are temporarily down.

8. Pull distributions from safe assets: If you need a distribution or are currently taking distributions from accounts for retirement income, pulling from safe assets are beneficial and do not force us to sell at low prices. Taking the distributions from our “Safe Bucket” include assets like high-quality fixed income, treasury funds, money market and annuities.

9. Build an investment watchlist: At times of stress, opportunities present themselves. Good companies get oversold due to the madness of people panic selling. This creates good buying opportunities. Look for good companies with clean balance sheets that have been oversold. Ask yourself, “In three to five years from now, is this company still going to be in business?” If you work with us, we are building this watchlist of potential investments already.

10. Schedule a quick call with me: If you are concerned, stressed, or want to discuss your specific plan in relation to any of these above-mentioned points, use this link and schedule a quick call with me shortly. As always, we are here to help you make the best financial decisions. Thank you for your support. We will get through this difficult time. If we act on the opportunities, we will get through this and be in a great situation in the future.




© 2020 Promontory Financial Planning. The material provided is for general information, and should not be considered a solicitation for the purchase or sale of any security.

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