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What to do When You Feel Market Whiplash

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What Coronavirus Can Remind Us About Personal Finance

March 29, 2020

In today's environment it's easy to live in a state of panic and fear. Especially when you continually hear "Dow down 2000 points" "we are in a recession" "stimulus package" "rising cases and deaths". However, grounding yourself in the things you can control and focusing on them will allow you to put yourself in the best position to succeed moving forward. That is why we are having our clients and you as well focus on what you can know rather than the things you can't know.

Know What You Can Know

  • The Facts:
    • A 20% correction tends to happen every 3 ½-4 years.
    • This is the fastest correction in history only taking 22 days.
    • The average amount of time for correction from start to end is 296 days.
    • Of the last 11 epidemics since 1981 (HIV) the S&P was positive within 12 months 9 of the 11 times with the average rate of return being 13.6%.
  • Prepare for getting laid off by building up a cash reserve and having your ducks in a row.
  • Understand your work benefits and what happens if you get a severance package. Take advantage of this while you can.
  • Having a high-quality financial plan is important. If you don't then there is no strategy in place that currently align with your long-term goals and you should re-evaluate this once we get past this rough patch.
  • You should evaluate what access you have too cash, either through reserves or a line of credit if need capital right now.
  • Having money in the market for a goal 1-2 years away is not smart and the risk you take on is not worth the potential reward.
  • Having the proper allocation in your portfolio by acting your age and allocating that number to the fixed income bucket in your portfolio.
  • You should consider tax loss harvesting to get rid of the positions that you don't like long-term and reap the tax benefit.
  • Consider converting some of your Traditional IRA funds to Roth IRA if appropriate to pay taxes on the lower amount and not pay taxes on future growth.

Know What You Can't Know

  • Whether the stock market will go up or down on a given day. No one has a crystal ball so don't invest on direction of the market.
  • Whether a company will go broke or survive Covid-19. This goes back to have a solid investment allocation and not staking your investments on 1 or 2 companies.
  • What media story will come out or government action and the impact on the markets that day. You can't let the latest story or legislation dictate where your investments should be.
  • Which sectors will bounce back quickly. Knowing which ones will get through this rough patch is anyone's guess.
  • Whether there will be a run on the banks. Something that we can't predict and if there were there wouldn't be enough cash to pay everyone out anyway.
  • Who will win the election. Given everything going on right now there is uncertainty in a lot of areas including this and you can't expect to know what things will look like in October.
  • What tax laws will look like in the coming years. This is a common question, but hard to determine what this will exactly look like in years to come.


At the end of the day you can choose to focus on the things you can control or things that you can't. Only one of those will get you closer to where you want to be at. While you may believe this is a significant event and you don't know how we will recover just look at history. We are a resilient breed, and this too shall pass. Focus on the things you can do each day and you will get the long-term results that you desire.

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Coronavirus: What To Do If You Get Laid Off From Work

About the author

a person wearing a suit and tie smiling at the camera

Kurt Brucker

Vice President, Private CFO®

Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. oXYGen Financial is not affiliated with Kestra IS or Kestra AS. Kestra IS and Kestra AS do not provide tax or legal advice.

The opinions expressed in this commentary are those of the author and may not necessarily reflect those held by Kestra Investment Services, LLC or Kestra Advisory Services, LLC. This is for general information only and is not intended to provide specific investment advice or recommendations for any individual.

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Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. oXYGen Financial is not affiliated with Kestra IS or Kestra AS. Kestra IS and Kestra AS do not provide tax or legal advice.

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