I Have Answers to Your Questions

I Have Answers to Your Questions

March 16, 2020

Show of hands – Do you remember a meeting when I said something along the lines of “We have experienced a decade long bull market; this is not sustainable and we are overdue for a market correction?”

Keep your hand up if I followed up that comment with a discussion about your risk tolerance and increasing your allocation to bonds as a hedge against any future market volatility.

Raise your other hand if I asked you about your short-term liquidity needs, reviewed your time frame to retirement and discussed any upcoming major expenses.


Dear Clients,

I expected this correction and we have a plan in place that is designed to withstand the cycles of the market and the economy over the long term. History has shown that bear markets are a normal occurrence and that patient investors have been rewarded over the long-term.

I know that this market correction is particularly scary combined with the coronavirus pandemic but know that I am here to address any of your questions or concerns. I am also here to point out the opportunities that this market downturn presents:

  • Cash: Many investors are tempted to reduce their holdings or sell out of their investments when markets are down. However, cash is not a preferred asset class right now since interest rates are very low and it’s not keeping pace with inflation.It is actually a great time to invest since prices are low, which allows you to purchase more shares at a lower cost. Given that we are in midst of tax season, it’s a great time for IRA funding. By investing now, you will have a greater opportunity to benefit when markets rebound.
  • Interest Rates: Take advantage of low interest rates is by refinancing to either free up cash flow or shorten the term of your mortgage to pay it off sooner (ideal for clients who would otherwise be carrying a mortgage into retirement).
  • Diversification: It is important to remember that you will still need your investments to work for you as you continue to draw income throughout your retirement years. A well-diversified portfolio can help you meet your retirement income needs with a level of risk that you feel comfortable with.

You will hopefully live 20-30 healthy years in retirement which, if you think about it, is basically the same amount of time you saved for retirement. You need to continue to stay invested to fund your retirement lifestyle and keep up with the cost of living. Upon retirement, you will not be liquidating all your holdings and sitting in cash (certainly not in this low interest rate environment).

As your financial advisor, I take the responsibility of helping you plan for your financial goals very seriously. I have answers to your questions – please call me any time.

All performance referenced is historical and is no guarantee of future results. No strategy assures success or protects against loss.