As with most things in life, you can look at the glass as half-full or half-empty. Humans have a built-in retreat instinct when facing a situation that causes fear; however, most crisis situations provide some opportunity for gain. We believe the current Covid-19 interruption is no different. What financial opportunities are available now that could benefit you?

  1. Invest More Money – The objective of any successful investor is to buy low and sell high. During the last three months we have seen many good companies experience a dramatic drop in their stock price. In addition, many of us have received $1,200 from our Federal Government. What a great time to make a Roth IRA contribution or contribute to another investment account!
  2. Review Investment Allocations – Prior to the recent months, the stock market had experienced almost 11 years of mostly positive returns. Some investors over the latter years of this stock market run have become cautious and more conservative. This would be a good time to review your investment allocations and investment timeframe. It could make sense to reset your long-term investments to a more aggressive investment allocation.
  3. Make Planned Purchases – This could be a great time to make a significant purchase. The mandatory shutdown has forced many businesses to reduce prices and find creative ways to deliver goods and services. This suggestion is intended for you only if you had predetermined before the crisis that you needed to make this purchase, and also, that you have the money set aside to do so.
  4. Refinance Your Mortgage – Mortgage rates are again at or near all-time lows. If you are someone who has a mortgage rate above 4% and you plan to stay in your current home for a long time, you might benefit from refinancing. There are multiple factors to consider when determining if refinancing makes sense for you. I would suggest seeking a reputable mortgage lender to carefully review your situation before deciding if this is a viable strategy for you.
  5. Convert a Traditional IRA to a Roth IRA – A great time to make a Roth IRA conversion is during an investment market downturn. You can pay tax on the Traditional IRA at a decreased value and then have the opportunity for the investment to recover and build tax-free inside the Roth IRA. In addition, the current crisis might have decreased your income this year giving you the ability to pay tax on the Traditional IRA conversion at a reduced tax bracket rate.

As always, the team at Master’s is prepared to help you navigate whatever comes your way. If you believe you should pursue one of these strategies or are contemplating another financial matter right now, please reach out to us. We would be happy to schedule a call or an online meeting.

What financial matters have you been thinking about doing this Covid-19 interruption?