Your Financial Plan: It's Time to Focus on Things You Can Control


By David Root

Recently, I wrote about the biggest question we are currently being asked by our clients: “Am I going to be alright?”

With the country being in a lock down state, it's easy to worry about your money. Whether it's a sizable or small portfolio, or a 401(k) - investors and savers are wondering when we will reach bottom in this coronavirus world. With so much volatility, it's reasonable to want to avoid focusing on the stock market entirely.

We are in bear market territory – and whether the stock market will still go lower is still to be seen. That said, I want to discuss the second most asked question from clients:

“Is now the time to buy?”

I certainly don't want to suggest I am sounding the all clear signal, but we are doing a bit of nibbling right now as stock prices are at levels we haven't seen for some time. The best investors, including Warren Buffet, say that if investing in a bear market, you can be assured they will be worth more a year from now.

This can be the difference in achieving financial independence sooner. And now we have more time to think about how this may fit our long-term strategy. With so much happening that we don't have control over, it could be a great time to focus on some things we can control.

It would be an especially good time to pull out your financial planning checklist and see how you are doing. The list may include getting your estate in good order on such issues as beneficiaries and powers of attorney. Review the adequacy of all of your insurance policies. Take stock in your retirement plan and look into how the changing tax policies may benefit you.

So, I offer an important third question: “Do I have all of my bases covered?”

Having a solid financial plan in place now can be empowering for investors who have felt helpless recently. The stock market may offer some great sale prices on stocks right now, but jumping into the market requires a strong tolerance for risk – financially and emotionally.

And it may not matter. Especially regarding a fourth question from clients who are nearing retirement: “Will this disrupt my retirement if I am looking at a three to five-year window?”

Not necessarily.

If your advisor has worked with you to do a simple retirement projection using prevailing software such as MoneyGuidePro in our case, then bear market conditions have been factored in. There is a good chance that a successful retirement projection done pre bear market will still hold up post bear market.

Regardless, you are going to need a professional to help you sort through this and ensure you have a properly balanced portfolio going forward.

And yes, we are going to be alright.

Thanks for reading,

Dave

David Root

Founder and CEO

DBR & CO

David Root is Founder and CEO at DBR & CO, a Pittsburgh-based wealth management firm. If you would like to contact the author, David Root, please e-mail him at d.rootjr@dbroot.com or call 412-227-2800.

This material has been provided for general, informational purposes only, represents only a summary of the topics discussed, and is not suitable for everyone. The information contained herein should not be construed as personalized investment advice or recommendations. Rather, they simply reflect the opinions and views of the author. D. B. Root & Company, LLC. does not provide legal, tax, or accounting advice. Before making decisions with legal, tax, or accounting ramifications, you should consult appropriate professionals for advice that is specific to your situation. There can be no assurance that any particular strategy or investment will prove profitable. This document contains information derived from third party sources. Although we believe these third-party sources to be reliable, we make no representations as to the accuracy or completeness of any information derived from such sources, and take no responsibility therefore. This document contains certain forward-looking statements signaled by words such as "anticipate," "expect", or "believe" that indicate future possibilities. Due to known and unknown risks, other uncertainties and factors, actual results may differ materially from the expectations portrayed in such forward-looking statements. As such, there is no guarantee that the expectations, beliefs, views and opinions expressed in this document will come to pass. Information presented herein is subject to change without notice and should not be considered as a solicitation to buy or sell any security.

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