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Four Steps That May Help Your Financial Plan


Tiffany Coffin, CFP®

2020 has certainly been an interesting year so far! We hit all-time highs on February 12th and shortly after, the coronavirus pandemic caused the fastest bear market ever ­(down 32% in four weeks). We have since seen the market move back up +20%. Here are a couple important things to be aware of:

  • Economy: Effects from the coronavirus could shut down as much as 30% to 40% of our economy in the second quarter. 
  • Stimulus: The IRS launched a website to help you track your stimulus payment. In addition, it appears as though the $350 billion in small business loans have already been exhausted.

Four Steps You Can Take Right Now That May Help Your Financial Plan

  1. Consider a Roth conversion: The best time to do a Roth conversion is when the market is down. This allows you to lessen the tax bite and have future appreciation in the Roth IRA. RMD’s for this year are suspended, however this may be a good strategy to use with those funds. 
  2. Maintain adequate cash: Make sure you have cash to cover 3-6 months of expenses. In times like these, we suggest going on the high end. If you are taking portfolio withdrawals, but have enough cash, we recommend suspending withdrawals while the market is down or modifying your withdrawal amount. 
  3. Add to stocks a little bit at a time: If you have cash on the sideline or are wanting to move a portion of your portfolio to stocks, but fear stocks could go lower, consider dollar-cost-averaging over the next few months. This will eliminate trying to time the market and allow you to get in while the market is down.  
  4. Review large single stock positions: You may not have been able to reduce your overall exposure to a specific holding due to the capital gains. You may be able to reduce your risk in the portfolio without having significant tax consequences due to the market pulling back. 

If you have any questions, please reach out. We would love to chat about this or any other items currently on your mind. Remember, we are always a quick email or phone call away. You aren't alone in this wild ride, we are here to support and assist you in any way we can. In the meantime, take a breath and remember we'll get through this together. Take care and stay healthy. We will be seeing you again soon. 

FSB Premier

This blog is intended to be an informational resource for readers. The views expressed on this blog are those of the bloggers, and not necessarily those of FSB Premier. This blog does not provide legal, financial, accounting or tax advice. The content on this blog is "as is" and carries no warranties. FSB Premier does not warrant or guarantee the accuracy, reliability, and completeness of the content on this blog. 

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