First and foremost, our thoughts and prayers go out to everyone during this historic time.
That being said, as personal financial advisors, my team must still be vigilant for mitigating financial loss as well as seeking new and present opportunity to take advantage of the current market situation.
Buy Low, Sell High
You may have heard the saying before that the "time to buy is when there is blood in the streets". Another favorite of mine is "Be fearful when others are greedy, and greedy when others are fearful."
At Inspire Financial Planning, we espouse these types of contrarian investing philosophies. In addition, we try to acquire clients who share the same vision. Buy low, sell high.
Last year we wrote a piece on how financial advisors prepare for these sort of dire market swings. Another was written called Stock Market Déjà Vu when the market started behaving reminiscent of 2008. We have been preparing for this current opportunity for some time.
There are many ways to prepare for a stock market crash, and we believe that by working with your financial advisor, remaining patient, and having cash at the ready one can make advancements during turbulent times.
If you are of the same mindset, you may already be preparing to move some cash into equities. See below for some of our preferred asset classes. Of the six asset classes we track in our Vanguard equity portfolios, all are priced much more attractively than they were just a few weeks ago.
Bear Market Duration
While some bear markets have lasted years, there have been other bear markets that corrected within a period of months, or even weeks. These more short-lived bear markets are often referred to as "V" shaped. While we cannot say for sure, we are of the belief that this bear market will be shorter than average.
That being said, if you have always wanted to get in on the market when there was "blood in the streets", that time may well be now. I believe, at a very minimum, the time to start the conversation with your financial advisor is now.
Buy when there is blood in the streets. Baron Rothschild
Be fearful when others are greedy, and greedy when others are fearful. Warren Buffett
About the Author
Jeff Headrick is an independent financial planner and wealth manager with Inspire Financial Planning. When Jeff was still in his teens his father died unexpectedly. While his father was a hard worker and a good provider, he did not have the best financial plan in place when he died. This left his family at a difficult financial crossroad. This personal experience, coupled with being inspired by Sir John Templeton, Warren Buffett, Dave Ramsey, and the laws of compound interest, prompted Jeff to enter the financial services industry in 1999. He has been helping people with their financial planning ever since. Jeff lives in Wilmington, NC with his wife and two children. He spends most of his spare time just across the Intracoastal Waterway in Wrightsville Beach, enjoying the beauty of the NC Coast.
Charts and graphs contained herein should not serve as the sole determining factor for making investment decisions. All hypothetical scenarios are for illustrative purposes only. Investment Advisory Services offered through AlphaStar Capital Management, LLC a SEC Registered Investment Adviser. SEC registration does not constitute an endorsement of the firm by the Commission nor does it indicate that the adviser has attained a particular level of skill or ability. Investing involves risk including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Diversification does not guarantee profit nor is it guaranteed to protect assets. International investing involves special risks such as currency fluctuation and political instability and may not be suitable for all investors. Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance. Past performance does not guarantee future results.
You cannot invest directly in an index. Consult your financial professional before making any investment decision. Fixed income investments are subject to various risks including changes in interest rates, credit quality, inflation risk, market valuations, prepayments, corporate events, tax ramifications and other factors.
These are the views of Inspire Financial Planning and not necessarily those of AlphaStar Capital Management, LLC, and should not be construed as investment advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. Please consult your financial advisor for further information.