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How to be Proactive During Market Turmoil

The spread of the coronavirus in the U.S. has roiled markets, sending the Dow on several 1,000+ point price swings.  The news about the virus will almost certainly get worse before it gets better.  How can investors hold their nerve during this turmoil?

Bouts of market volatility are inevitable.  During such times, it is important for investors to take proactive steps to stay on course with their long-term financial plans.  Here are just a few actions investors might consider taking to put themselves in a stronger position for when the rebound comes.

  1. Do Some Tax Loss Harvesting:

With this strategy, an investor sells a losing investment in a taxable account and replaces it with a similar (but not identical) investment.  The investor can use the realized capital loss to offset capital gains or some other taxable income while still maintaining consistent investment exposure. 

  1. Rebalance Your Portfolio:

Depending on your current situation, now may be a good time to increase your exposure to equities (which have dropped) and/or decrease your exposure to bonds (which have mostly risen.)  Remember, buy low, sell high!

  1. Accelerate Retirement Plan Contributions while Markets are Down:

Many investors wait until the last minute to make retirement plan contributions.  With equities now under pressure, investors should consider making their 2020 contributions right away, while prices are discounted.

  1. Seek Out Fresh, Independent, Objective Advice:

Most financial advice is compromised and hobbled by inherent conflicts of interest.  We are different.  Orion is a fee-only Registered Investment Advisor.  Unlike banks, brokerage firms and mutual funds companies, our firm is an independent fiduciary that puts client interests ahead of our own.  We are veteran-owned and have no affiliation with any other financial institution.  We sit on our clients’ side of the table.

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Peter Thoms, CFA, MBA

Peter Thoms, CFA, MBA

Peter Thoms, CFA, founded Orion Capital Management LLC in April 2002. Peter has extensive experience managing investment portfolios for clients pursuing a wide range of financial goals.

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