First and foremost, I hope everyone is staying safe and healthy during this unbelievable time we are living in. A special thank you to those healthcare workers and all essential service men and women that are helping all of us through a very difficult time. At the risk of being tone deaf to what is going on, we do want to make sure we are communicating with you on a regular basis. We wanted to take a moment to share some of the most common questions that we are getting from clients, and even neighbors when we’re out on our evening walks! I share these because if you are thinking or feeling some of these same things just know that you are not alone.
- Should we sell and buy back in when things settle down? In theory, yes this makes great sense. In reality it is next to impossible to time the markets, especially during periods of heightened volatility. I (NO ONE) can tell you when that will be, and most likely markets will have recovered/moved up well ahead of when the ‘dust has settled’.
- Should we shift our portfolio into something more conservative?This one is much more nuanced and can vary depending on a person’s specific financial situation. Similar to above, the issue with making a change in the midst of extreme volatility is knowing if/when to reinvest back into ‘the market’.
- Should we look at buying/investing right now? Again very nuanced and really depends on personal situations. Oddly, when markets decline their expected future returns go up. Having said that, it is important to consider a number of factors before making that decision. Said another way, it is next to impossible to time the markets. So if someone is looking to invest today it is important to understand things will may be volatile (up and down) for the foreseeable future.
Please know that while we’re working remote during this time we are available to connect for a call/virtual meeting. If you would like to have a conversation about your personal financial situation, please feel free to reach out and we can coordinate a time. I would also extend this offer to family/friends that may have questions or concerns about their financial situation. We may not have all the answers, but I will promise we will be willing to listen and it is my belief during times like these it is important to help where and how we can.
One quote and thought to end with; there’s a saying that I picked up from a financial commentator Morgan Housel; “Personal finance is much more personal than it is financial.” This is true now more than ever in my opinion. Money can be emotional – markets are driven by fear and greed. Based on the past week, we are seeing plenty of both.
Stay safe and stay healthy, and we will get through this together.
Andy