We’re in an extremely volatile time, but the world doesn’t end very often, last time we checked. Just because you are in quarantine doesn’t mean you can’t take action and make some smart decisions about your money that will have a long lasting positive impact. There is no better time than now, to start preparing for when things get better. So time to start cleaning up your financial picture.
Today, Bob and I are going to guide you on how to position your portfolio for the inevitable economic rebound. We’re also going to break down how to put your financial life in order.
For our spotlight segment, we have our colleague, Certified Financial Planner™, Courtney Dominguez. Find out what being diversified really means as she shares how she increased the yearly income of a couple that was taking in too much risk.
We’ve got a great show here, so tune in to the No Payne, No Gain podcast now!
Financial Propaganda of the Week
A lot has been going on this week. The market made a huge rally from the bottom. The news is coming in worse than ever. It’s crazy out there! Here are the things you need to know about:
04:01 – Media is a danger to your financial health. The news is a lagging indicator, not a leading indicator. When it comes to investing, always look forward. The media only focuses on looking for an event to explain the market move.
05:18 – The most dangerous thing is when there are a lot of people telling you what’s going to happen. The truth is nobody predicted that the Coronavirus pandemic was going to happen. Anyone can predict what happened with hindsight.
06:53 – When uncertainty is the greatest, that’s the best time to buy. The market will accelerate even if the news is bad.
07:14 – If you’re going to rely on the news to make your financial decisions, you’re going to be behind. Once it’s in the news, the market is already priced in. You’re not getting insider information.
07:59 – Never go with your emotions. Investing is a discipline based on your goals.
09:01 – Cash yields zero returns. Zero net of 2% inflation means that you’re getting negative returns.
Preparing for the Economic Rebound
We’re basically in a recession at this point. Forgive yourself for not seeing it coming and focus on looking forward. Let’s think about what would be the likeliest outcomes that are going to happen from here.
13:37 – When things are down, that’s the best time to make some proactive decisions even if you don’t want to look at your financial statement.
14:11 – Diversification works. Having an all weather portfolio puts you in a good position. First things first, make sure the safe side of your portfolio is truly safe.
15:11 – Bond funds are not safe. There’s a lot of low quality credits. Make sure you have an investment-grade portfolio because those bonds did well.
15:52 – Don’t give up on stocks. You need dividends and dividend yields in equities are great right now.
17:18 – The pandemic is temporary. Your goals aren’t. Don’t wait for things to settle down. Don’t be afraid to go back in to buy some equities while they’re on sale.
Decluttering Your Financial Life
Since you’re trapped in your house and have a lot of time, you’ve probably been organizing and cleaning out your closets. Well, you should also do the same thing for your financial portfolio. Let’s go through some of the principles used in house cleaning and apply them to your financial life.
22:15 – Most of us know very little about our own financial assets. You forget the stuff you have, so now’s a good time to start tallying up your assets.
24:16 – Ninety percent of investors take more risks than they should because they never sat down and looked at the complete picture of their net worth.
25:33 – Take a look at your budget line and check what are the things you’re spending money on. There’s probably a lot of things that you don’t have to spend money on now.
26:47 – Interest rates are low right now. Maybe it’s time to refinance your mortgage.
Got any questions about the economy or the market? We get a lot of investment-related questions coming in. We’ll be happy to answer them for you, simply send us an email at email@example.com.
32:02 – Question #1: “Would you recommend selling investment-grade bonds and going into cash? Is this what you’re currently doing? I don’t need the cash for business or personal needs.”
34:16 – Question #2: “Is now a good time to build up cash instead of buying into this volatile market?”
Today, we have our Certified Financial Planner™, Courtney Dominguez. She tells us how she was able to increase the income for a couple by over $100,000 a year just by getting more conservative and truly diversified.
41:47 – A couple in their early 60s who’ve been doing their own investments came to us wanting experts to take a look at their portfolio and see if they’re set up with enough funds and assets to retire on.
42:21 – The couple thought they were very diversified, but all of their different Vanguard funds owned the same underlying investments. Half of their funds actually have the same top holding.
43:27 – When it comes to retirement, you want to look smart. You need to make sure there’s certainty built in especially at times like this when we’re facing the Coronavirus.
46:04 – The couple had over 60% of their money in the stock market and when you’re that close to retirement, that’s a lot of money to have at risk.
Do you need a game plan for these volatile times? We’ll make sure you’re making the right decisions for your retirement plan. Schedule a call with one of us at https://paynecm.com/game-plan-call/
“You need to have your big portfolio bonds here. Sitting money in cash and earning nothing right now is not a great long-term game plan.”
To download 5 Ways to Maximize Your Retirement Accounts and Save on Taxes in 2020 and the Highlights from the new SECURE Act, text BULLISH to 555888.
If you have saved over $500,000 for retirement and need a plan based on your retirement goals, Bob and Ryan will create a 360 Financial Portal just for you! Text or call 844-752-6692 to check out the 360 Financial Portal with no strings attached!
Contact us for a consultation with our financial advisors to start a personalized plan
IMPORTANT DISCLOSURE INFORMATION
Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Payne Capital Management, LLC), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from Payne Capital Management, LLC. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. Payne Capital Management, LLC is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of the Payne Capital Management, LLC’s current written disclosure statement discussing our advisory services and fees is available for review upon request.