What advice would you give for people worried about our financial future?
The range of unknowns raises the uncertainty around the timing of a rebound. While we don’t attempt to time the market precisely, as a long-term investor, you should take comfort in the advantage of time in the market, not timing the market.
However, we remain confident that a rebound will take shape. It may take a while longer to materialize, but we think it will be robust and fueled by a return of confidence in the post-virus outlook. Long-term investors don’t need to capitalize on the pullback all at once but should consider opportunities to benefit from this decline.
For our readers that have students about to head to college or in college, what is some guidance for using their 529 plans?
Ideally, those with children or grandchildren nearing college developed a college savings strategy that considers rising college costs, the impact of financial aid and balancing competing goals such as retirement. As students get closer to college, their college savings plans should become more conservative to adjust to their time horizon for when those funds will be used. We would recommend portfolios contain not just stock-based mutual funds but bonds as well. You may need to consider other sources of funding like savings or loans until the investments regain their previous value.
How do you recommend Americans prioritize what to do with the first round and any future rounds of stimulus money they receive?
If immediate needs are covered, the stimulus checks provide an opportunity to establish or build upon your emergency fund. Six to twelve months of fixed expenses is ideal, and this might help get someone started or continue on their journey.
What's your number one piece of advice you have for people right now with their investments?
When markets are volatile, it's easy for investors to lose sight of their long-term goals. Someone planning for retirement doesn't typically have a time horizon of six months to a year. It's usually 20 years or more when they are going to need those dollars, so it's best to look at your financial plan and stick with it. Best to keep in mind that downturns are normal, upturns follow the downturns and the upturns last a lot longer.
What if someone was planning to retire in the next few years, what will this mean for them?
This is a time for someone in this stage to take a look at what they are expecting to spend on a month-to-month basis in retirement. Visualize your retirement and tie an amount to that in today's dollars. That's where working with a financial professional can make a big difference.
To schedule a time to speak with one of these trusted advisors, you can contact Sye Mishler at 513.777.7557 and Gage Hemmelgarn at 513.777.5555. EdwardJones.com