Recent Comments


    Investing in the Time of Coronavirus

    By Brandon Miller, CFP–

    There’s nothing like a global pandemic to send stock exchanges into a whirl. Unprecedented freefalls are followed by record gains, only to drop again days, even hours, later. Good news tanks the market while bad news causes historic rises. In our new up-is-down world, there is just no predicting what will happen with investments from day to day.

    So, should you keep investing during this time if you are able? (Short answer, yes.) And what can you do to protect yourself during these uncertain times? Here are a few suggestions:

    Keep things in perspective. Simply put, volatility is a given when you are investing. It doesn’t have to be anything as dramatic as a killer virus to affect the market. Something as simple as an earnings report can rattle investors. But history has shown us that market setbacks are typically followed by periods of recovery. This tends to be the case even after pandemics, wars, political uprisings, and more. So, it’s always best to keep the long view when thinking about investing.

    Create a goals-based plan. Instead of chasing the next great investment or bailing out when stocks sink, develop an investing strategy that centers around what you want to achieve in life. Your goals are probably more stable than the markets, so a solid plan makes it easier to weather ups and downs.

    A goals-based plan also removes the temptation to try market timing, where you attempt to buy when investments are low and sell when they’re high. This is challenging, to say the least, since no one really knows where the market is headed at any given time. And it could actually end up costing you money if you get into or out of the market at the wrong time.

    Diversify your investments. Investing in different types of assets helps spread out your risk. Often when one type of investment is down, another asset class may be experiencing banner growth. For example, many bond investments have gained a tremendous amount of value in 2020, but at the same time many stocks have lost significant value. Using an asset allocation strategy, you can balance risk and reward by investing in different types of assets in portions that make sense for your goals, risk tolerance, and time horizon.

    Invest regularly. One of the smartest ways to combat market uncertainty is to create a regular investment schedule. You can choose any interval that works for you—weekly, monthly, quarterly, or per paycheck. The beauty of this strategy is that you invest during both peaks and valleys, which helps to even things out. And this disciplined approach helps to ensure that downturns have less impact on your portfolio’s ultimate performance.

    Review your investments often. As this pandemic has made all too clear, your world can change quickly. Your investments may need to change too, to reflect new realities. Reviewing your portfolio regularly—every year or six months, for example—can help to make sure that your investments take advantage of new opportunities, while still aligning with your ultimate investment goals.

    Turn to the professionals. Money is a very emotional thing for many people and staying objective about it can be hard. Worrying excessively about your investments could be a sign that you’re not in the right ones. Or maybe you’re not comfortable with, or willing to do, all the work of creating and managing an investment schedule and plan. Luckily, there are lots of people like me who can take that on for you.

    A professional financial consultant can help you to find assets that fit your risk tolerance, while also making sure that your investments reflect your values (keeping gun investments out of your portfolio, for example), and advance you toward your goals. I highly suggest working with someone who is a fiduciary, which means that they are legally obligated to work in your best interest.

    Whether you turn to professional help or go it alone, the main thing to remember is that a goals-based investment strategy is one of the best antidotes to investment market uncertainty and anxiety. Given that we have no idea how long this virus will be with us or the full impact of the financial fallout it will cause, creating a solid financial plan now may be the closest thing to a vaccine that you can get for your financial health.

    The opinions expressed in this article are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security. Brio does not provide tax or legal advice, and nothing contained in these materials should be taken as such. To determine which investments may be appropriate for you, consult your financial advisor prior to investing. As always please remember investing involves risk and possible loss of principal capital; please seek advice from a licensed professional.

    Brio Financial Group is a registered investment adviser. SEC Registration does not constitute an endorsement of Brio by the SEC nor does it indicate that Brio has attained a particular level of skill or ability. Advisory services are only offered to clients or prospective clients where Brio Financial Group and its representatives are properly licensed or exempt from licensure. No advice may be rendered by Brio Financial Group unless a client service agreement is in place.

    Brandon Miller, CFP®, is a financial consultant at Brio Financial Group in San Francisco, specializing in helping LGBT individuals and families plan and achieve their financial goals.

    Published on May 7, 2020