With market highs and lows, a personal finance expert says there are money moves you can make now
By: Rachel DePompa
(InvestigateTV) With coronavirus concerns in the U.S., turbulence is setting in on Wall Street. This comes after years of prosperity, so some investors are left with extra concerns and questions.
Wall Street’s been on an upswing for quite some time. Even as coronavirus fears and fretting headlines are now the norm, experts said not to panic.
“I think it’s really important not to think about not as much about the stock market and its performance but to think about your own goals,” said Arielle O’Shea, a NerdWallet personal finance expert.
In most cases your goals are still the same, which is why O’Shea said when it comes to the money you’ve invested for your nest egg, don’t start worrying.
“You don’t want to be a scared investor, but you do need to know that if you’re a long-term investor, there are going to be periods of market volatility. It’s unavoidable,” O’Shea said.
O’Shea said to make sure you’re always prepared to weather a market storm. Have the thought that you it’s the long haul. It’s not immediate
“Set yourself up for success… right? So, you want to make sure that you’re in a portfolio that is aligned with your risk tolerance. Which means you’re not taking more risk than you can handle. You’re not going to set yourself up to panic sell. Investing is really for long-term goals– retirement. So, it’s money you won’t need anytime soon,” O’Shea said.
To look at where your money is and where it should be, O’Shea advised concentrating on emergency money.
“So, check in on your emergency fund. An emergency fund will let you cover bills in case you lose your job. It will also help you avoid tapping your investments because you have this liquid cash. And so just having an emergency fund makes you feel more secure and it allows you to sleep better at night. And if it’s going to make sense for you to have a bigger emergency fund, if they’re going to have feel more comfortable with a bigger emergency fund, then start filling that up,” she said.
If you feel like you might panic, put your money in someone else’s hands, like a financial advisor.
“They’re really doing the day-to-day watching. They’re really making sure that you’re invested in a way that meets your needs, and you don’t have to worry about those little details,” O’Shea said.
O’Shea said a financial advisor isn’t necessarily expensive – especially if you look into robo-advisors.
Thos are online advisors that use computer algorithms and advanced software to build and manage your investment portfolio.
“Some of them are free. Some of them you will pay 0.25% of your balance. It gets taken right out of your investment, so it’s a very small amount of money per year depending on your account size. But you can afford it because if you have investments, you can afford that very tiny bit to go pay to a robo advisor,” O’Shea said.
In the end, highs and lows are normal. O’shea said not to stress and to remember your money is in that 401(k) or IRA for one reason: retirement. You shouldn’t need it anytime soon.