No one could have predicted the immediate devastation wrought by COVID-19. Our world was upended seemingly overnight, and we all are now left scrambling to understand the ever-shifting implications of this novel disease.
Health concerns always remain priority number 1. It’s likely we know someone affected, directly or indirectly, by the pernicious symptoms of the Coronavirus or the worldwide economic shutdown. But with our attention focused on the health and welfare of those around us, it’s easy to forget about our own financial lives.
In this guest article for Attorney at Law Magazine, Mike Hennessy, CFA, CFP®, founder and CEO of Harbor Crest Wealth Advisors, shares three strategies to protect your investment portfolio during this uncertain time. He recommends the following:
1. Stay on course by staying the course. A quote that Harbor Crest Wealth Advisors uses often with clients is, “It’s not timing the market, but time in the market, that matters.” Have you fretted about moving your portfolio out of stocks until the dust settles? While this is a natural and understandable emotion, it is quite simply the wrong financial decision. Moving back and forth from cash means you need to be right, twice — something that’s impossible to do. Ignore the short-term agita and let the market work for your long-term goals.
2. Acknowledge, and embrace, volatility. While many investors are worried about the COVID-19 market upheaval, volatility is a normal and necessary part of the market experience. Volatility also offers opportunities for investors. Two important tactics to employ during periods of heightened market upheaval are tax-loss harvesting and rebalancing.
3. Build a better portfolio for you. Constructing the best portfolio for you and your family should be an individualized, and aspirational, endeavor. We advocate a strategy that allocates your funds into specific buckets.
By following these three tips, you are well on your way to navigating the choppy waters of today’s market. You can read the full article, "Protecting Your Investment Portfolio in the Era of COVID-19," here.