Market Volatility in Context
How normal is the kind of market volatility we’re seeing now?
It turns out, the market historically performs in cycles with bull markets (or upswings) lasting much longer and with greater intensity than bear markets (or downswings).
The best course of action for diversified, long-term investors is to simply keep the blinders on and stay the course. We’ll weather this storm together.
In addition, you should also consider:
Reassessing your risk tolerance
Make sure you’re not taking on too much risk relative to your time horizon, liquidity needs, etc.
Rebalancing your portfolio
If your stocks and bonds are out of whack because of this rollercoaster ride of a market, make sure you sell investments that have gone up and purchase investments that have gone down to realign your portfolio with your target allocation.
Tax-loss harvesting in your brokerage accounts
Now is a great time to sell investments that have declined to gather a capital loss to offset your ordinary income (up to $3,000 per year) and future capital gains.
Check out my tips for staying invested during market volatility.
Long-term investors have historically been rewarded for staying invested and waiting out market storms!
Do you have concerns about your investment portfolio? Reach out to me at Ben@coveplanning.com or schedule a free consultation call.
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Ben Smith is a fee-only financial advisor and CERTIFIED FINANCIAL PLANNER™ (CFP®) Professional with offices in Milwaukee, WI, Evanston, IL and Minneapolis, MN, serving clients virtually across the country. Cove Financial Planning provides comprehensive financial planning and investment management services to individuals and families, regardless of location, with a focus on Socially Responsible Investing (SRI).
Ben acts as a fiduciary for his clients. He does not sell financial products or take commissions. Simply put, he sits on your side of the table and always works in your best interest. Learn more how we can help you Do Well While Doing Good!
Disclaimer: This article is provided for general information and illustration purposes only. Nothing contained in the material constitutes tax advice, a recommendation for purchase or sale of any security, or investment advisory services. I encourage you to consult a financial planner, accountant, and/or legal counsel for advice specific to your situation. Reproduction of this material is prohibited without written permission from Ben Smith, and all rights are reserved. Read the full Disclaimer.