Category: Volatile Market
Q2 and Three Steps to Take
The second quarter of 2020 is unlike any other. We’ve been in the midst of a global pandemic that led to the “stay-at-home” mandates that caused a sharp, deep recession and left nearly 20% of Americans unemployed1. In May and early June, after many thought the curve of new coronavirus cases had been successfully flattened, economic reopening occurred across the country. However, within weeks the virus spread and the US entered the July 4th weekend reporting record numbers. With some progress reportedly being made on several treatments and potential vaccines, many people have started pricing risk assets as if the worst of impact from COVID-19 is over. This was before the onset of what many are calling the “2nd wave” of new coronavirus cases, causing many to question the pace of any economic recovery. With expectations that the Federal Reserve will do “whatever it takes” to support the economy and risk assets investor attention has turned to Congress, as the $600 weekly unemployment benefit has ended. The passage of another fiscal stimulus bill is an uncertainty entering Q3, but one that is increasingly likely. What can you do in the face of uncertainty? 1. Understand and Prepare for Risk Take a hard look at your portfolio, and make sure that you understand your risks for the second half of the year, and into 2021. This volatility we are seeing – and have been seeing since late February, is very likely to
4 Helpful Strategies During this Volatile Market
Since the onset of COVID-19 in February, we’ve seen record volatility in the financial markets. But, it’s time in the markets, rather than timing the markets that will ultimately help set you up for success over the long-term. Here are a few strategies to help you keep your cool, remain invested, and weather the storm. First, consider using income-focused strategies to help weather today’s uncertainty. When investing in individual stocks, it’s important to use caution for growth purposes or when you are nearing retirement. Normally, it’s best to employ a combination of different tools, including bonds or fixed income, based on your financial goals and time horizon. Secondly, remember that planning now could save you and your family hundreds of thousands of dollars later. One of the major changes of the past year is the elimination of the “stretch” IRA. This rule changes the way your heirs are able to receive inherited funds. Before the change, you were able to spread the inherited money over the course of your heir’s lifetime, but under the new rule, you now have to withdraw those funds in 10 years. This greatly raises the amount of taxes that a beneficiary will have to pay on those funds. A way to avoid this is by using the gifting strategies, Roth conversions, or by creating a bloodline trust. Third, consider a bloodline trust to keep it all in the family. A bloodline trust is a way to help ensure that mon
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