Opportunities come infrequently. When it rains gold, put out the bucket, not the thimble”, Warren Buffet.

Helen Hartman, CRPC®, PPC®

These days it can feel like everything is spinning out of control. Many factions of our daily lives are temporarily changing and we want to know the best way to react. The stock market is seeing great reactions and my clients want to know- what do I do now?

Here are five steps to negotiate the volatile financial climate of COVID-19:

  1. Review your cash flow. Many people have changing wages and/or employment situations. Review your income versus your outflow. Do you need to cut out some unnecessary expenses? Has your income level changed? Do you have excess cash from a changed entertainment budget? Familiarize yourself with your current cash flow an adjust your budget accordingly. Move your extra earnings to your savings vehicles.
  2. Restructure debt. The current interest rates are some of the lowest of all times. While this low rate does not help savings account earnings, it does create great opportunity in lending. Do you have credit card debt? Student loan debt? Mortgage and home equity debt?  Look into refinancing or consolidating. You will benefit from paying less interest and improving your financial situation over the long run.
  3. Revisit your long-term financial goals. Are you still on track for your next big purchase ( home, car) ? Are you on track for retirement? Most long-term savings vehicles should be allocated to achieve goals over the long run- not the short term. Remember, there is greater risk and volatility with equity- based portfolio options. However, long term exposure to equities historically provides greater return from both growth and dividends. If your goals have not changed, neither should your plans.
  4. Shop for deals. Market volatility can often provide great purchases for long term money. Many people are buying great deals at this time. There is opportunity to purchase items at a much greater price. Are you watching for the latest sale at Old Navy? Macy’s? Look for the latest bargains in the stock market.  Consult a financial professional to advise on your personal situation to find out some of the great companies that have temporarily reduced stocks. Where it is feasible you may want to increase your 401k contribution or add cash to your investment accounts. Consult a professional for guidance.
  5. Do not act out of fear. Change can be disconcerting, unsettling. Look to the professionals for guidance so as not to act out of fear. A future plan is made to be adjusted. Changes will occur. Review and revise according to need not fear. Make sure your situation is constructed to meet your goals and stick to the plan.

As we all travel through this period in history, let us remember our long term goals. Revisit our plans. Seize the opportunities.

This article was written by Helen Hartman. She is a Wealth Advisor at Redwood Financial Network and she can be reached at 440-287-5020 or hhartman@redwoodfn.com