Posted 2 weeks ago - by

The Financial Market During COVID-19 and What a Professional Has to Say About It

Although necessary, the shelter-in-place measures taken across the country to help mitigate the spread of COVID-19, left many worried about what it means long-term for the economy. We recently sat down with our client, Mark Shone of Shone Wealth Management, to see what a financial planner CPA had to say and what advice he had.

Shone explained that people believe that the stock market’s current level, offers insight into where it may head in the future. When the Dow hit a record high in February 2020, for instance, there was some speculation about whether the index had peaked and would inevitably reverse in the coming weeks. When the markets turned out a poor showing in the first few weeks of March, others worried about how much further they would decline until things started to turn around again.

“Formulating your investment decisions around predictions about the market’s current level or recent performance is a form of market timing, which will ultimately result in a poor investment experience over the long term” Shone said,  “not only is it extremely difficult to do, timing the market — whether it’s speculating the right time to get in or get out — also can be costly.”

He encourages everyone to remember that a little perspective can go a long way toward improving your long-term investment experience. We have survived poor conditions in the past, and the comeback has often been more memorable than the downturn.

When asked if there were any proactive steps that people can take now, he shared with us two strategies that he believes can improve a financial situation over time. The first was, tax-loss harvesting. This means you are “harvesting” losses and immediately buying replacement securities in the same asset class. This then allows you to book a loss today, help you stay invested and offset future gains.

The second strategy was rebalancing. Shone urged the importance of rebalancing your portfolio back to your target allocation or desired level of risk. He shared three ways that the experts of Shone Wealth Management rebalance:

  1. Using additional cash that has been sent to them
  2. Adjusting what they sell to raise cash needed for monthly distributions (they would currently sell fixed income and not stocks).
  3. Implementing a broader based rebalance once the bond markets calm down.

Shone assured that they continually monitor all these factors for the best course of action.

He added, “As well as utilizing these strategies, investors should assess their job status and cash flow; balance their emergency fund and any large expenses expected in the next six months; and plan ahead for any updates to their goals and objectives and how those relate to the construction of their portfolio. By going through these steps, you’ll be better prepared.”

Overall, he stressed that whether the markets rebound or we see more volatility in the coming weeks and months, the best strategy overall will be to stay focused on any long-term financial plans and try to tune out all of the noise.

Here at Payroll Systems we are proud of our clients and the work that they do.  For more information on Shone Wealth Management, visit their website.  For information on Payroll Systems, including how to navigate items such as the Family First act, CARES act, and Payroll Protection Program visit payroll-us.com.

Related Posts

California’s Local Minimum Wage Increases & SF’s PPLO Expansion On Track for July 1

The minimum wage in the state of California has seen a yearly increase in recent years The change varies across cities and counties and is based on the amount of employees a company has For 2020,...

Read more...

How to Handle Coronavirus-Related Layoffs in the Most Responsible Way

In addition to the widespread anxiety the current pandemic has caused, layoffs have become inevitable for many organizations The state of local and global economies is rapidly fluctuating- leaving...

Read more...

Recalling Furloughed Employees: How Ready Are You?

When recalling furloughed employees, it is crucial that you adhere to your organization’s policies and procedures Basing a decision on pre-established guidelines can help avoid violating any...

Read more...

How to Make a Clean Switch to a New Payroll Service Provider

Partnering with a payroll service provider offers significant benefits: cost savings, time savings, and minimized errors, among others To optimize these benefits, first you must find the right...

Read more...

How Long Should You Keep Employee Records?

(An Overview) The answer to the question above depends on two things: The type of record The law in your state The best first step is to consult your legal team or HR...

Read more...

Ensure Small Business Productivity with Labor Cost Distribution Reports

As the term human resources suggests, HR is about the people It involves everything from getting them on board, assessing their performance, to computing their compensation and putting together their...

Read more...

Leave a Reply

Your email address will not be published. Required fields are marked *

This article provides general information and shouldn’t be construed as legal or HR advice. Since employment laws may change over time and can vary by location and industry, please consult a lawyer or HR expert for advice specific to your business. You can also contact Payroll Systems to inquire about our HR support services.