Skip to main content
(352) 666 8668 john.laconca@jwcemail.com
  •  

  • Home
  • About
  • Our Services
  • Resources
  • Blog
  • Client Login
  • Contact

    You are here

  1. Home
  2. Blogs
  3. What Not to do During the COVID-19 Crisis

What Not to do During the COVID-19 Crisis

Submitted by Nature Coast Wealth Management on May 1st, 2020
  • Share on Facebook
  • Facebook Like

Intro

There’s no two ways around it – the COVID-19 crisis is here to stay, at least for the foreseeable future. Even if social and medical conditions improve in the short term, there’s almost no doubt that the new bear market will remain in place through the end of 2020 (if not longer). As such, an investor like you needs to make plans to adjust their investment strategy so that you can stay afloat in these turbulent times.

However, the sudden onset of this crisis has led some investors to make moves that are sure to hurt them in the long run. While it’s had to know how any one choice will play in this bear market, there are some tried and true mistakes that even seasoned investors are making right now. These are just a few of those mistakes that you should keep in mind when speaking with your portfolio manager in the near future:

Go All in on Bonds

If you didn’t know much about bonds before, then this crisis likely gave you an opportunity to learn on the fly. These stable, government-backed investments have long been favored by investors who want to minimize their portfolio’s volatility.

The problem is, nearly every investor worth their salt has sought out some stability as the stock market’s averages dropped like rocks. As such, numerous investors have flocked to the bond market in under a month’s time. While some of them are wise to add a few bonds to their portfolio, others have gone completely overboard. That latter group will likely pay the price down the road.

Simply put, bonds can be too safe, even in a bear market. Once the stock market begins to show signs of recovery, those folks who are over-invested in bonds will be stuck with their new asset for the long haul. As such, they won’t be able to grow their portfolio’s value because they played it too safe with bonds.

Sell Off Your 401(k) Assets

Recently, some well-meaning portfolio advisors have given their clients the option of selling off some of their 401(k) assets as a way of making ends meet during this downturn. While this may feel like a smart move to ensure your own personal debts don’t pile up during this recession, you will almost certainly regret this move down the road.

This is because the vast majority of investors still have time to see their 401(k) funds recover. In particular, those who are young (relative to retirement age) and well invested in stocks/mutual funds will likely see their 401(k) funds recover as soon as the stock market enters the black once again. Only those close to retirement should consider any asset sell-offs as a means of guarantee at least some 401(k) payout.

React to Every Bit of News

Both socially and professionally, the novel coronavirus has a lot of folks panicked right now. Panic, however, is the worst enemy of investors and the investment market in general. As such, you should do your best to not buy and sell your investments with every fresh news cycle. Every day brings some change worth reacting to, but you should retain the fortitude to let that news pass you by.

Instead, try to stick to a consist investment strategy that minimizes timing the market. To do this, you can set an entry and exit time for your next investments, rather than an entry and exit price. This can help maintain consistent gains that are not tied to unexpected (and potentially unstable) growth.

The Bottom Line

Suffice to say, there are a lot of mistakes you could be making during the COVID-19 crisis. These are just a few that you may have already made while trying to react to the market’s recent bearish dive. If you have, head the immortal words of Douglas Adams and “don’t panic.” You still have time to right your ship’s course and return to calmer waters. Keep the tips above in mind and you’ll likely to feel just a bit more confident throughout this continuing crisis.

*This content is developed from sources believed to be providing accurate information. The information provided is not written or intended as tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. Individuals are encouraged to seek advice from their own tax or legal counsel. Individuals involved in the estate planning process should work with an estate planning team, including their own personal legal or tax counsel. Neither the information presented nor any opinion expressed constitutes a representation by us of a specific investment or the purchase or sale of any securities. Asset allocation and diversification do not ensure a profit or protect against loss in declining markets. This material was developed and produced by Advisor Websites to provide information on a topic that may be of interest. Copyright 2014-2020 Advisor Websites.

Tags:
  • 401k
  • Covid
  • Finance
  • Financial Goals
  • Investment
  • retirement
  • Rollover

Book a Meeting

Tell a Friend

Looking to learn more?

Get in touch today

Contact Us

Additional info

  • Sitemap
  • Legal, privacy, copyright and trademark information

Contact info

  •   13177 Spring Hill Dr, Spring Hill, Florida 34609
  •   (352) 666 8668 | (888) 466-4729
  •   john.laconca@jwcemail.com

Contact us

Advisory services offered through J.W. Cole Advisors, Inc.
J.W. Cole Financial, Inc., J.W. Cole Advisors, Inc., and Nature Coast Wealth Management Services, LLC are unaffiliated entities.
 Advisors must be properly registered in the state where you live in order to conduct securities related business with you. A response to your request for information might be delayed in order to assure our compliance with this regulation. No information provided on this site is intended as a solicitation to buy or sell any security. The investments and services mentioned may not be available in every state. No security will be offered or sold to any person, in any state in which such offer, solicitation, purchase, or sale would be unlawful under securities laws of such jurisdictions.
 All information is based on material believed to be true but not guaranteed and is subject to change.  Additionally, the Advisor does not verify the content of and is not responsible for the opinions of any other users’ posts on their social media site, all opinions are those of the Advisor and do not necessarily reflect those of J.W. Cole Financial, Inc. or J.W. Cole Advisors, Inc.
www.finra.org and www.sipc.org
 

© 2021 Nature Coast Wealth Management. All rights reserved.

Website Design For Financial Services Professionals