Living in uncertain times can cause different responses from people – from apprehension and fear in some to calmness and ease with others. However, when it comes to investing, uncertainty is nothing new. When you decide to invest, you have the opportunity to control the narrative of your future – whatever it may look like. And when things look dire all around, you’ll have the assurance you need you can make it through any dark times. Consider these six strategies to help:
Strategy #1: Look for new opportunities to invest.
The current state of the market represents a potential buying opportunity for many – and it’s still not too late to participate. Do your research and consult a financial advisor to find quality investments for your particular financial goals. Just be sure you have money set aside in an emergency fund you can access if needed.
Strategy #2: Boost your retirement savings where you can.
Now maybe the time to increase the amount of money you contribute to your retirement investments. For example, add a percentage point or two to your 401(k) contribution. If the market rebounds, you can always change your contribution level back to your original amount. The idea here is to put your money to work when the market is falling, and then when it rebounds, you’ll be in a better situation.
Strategy #3: Consider converting to a Roth IRA.
Most of us have been trained to save for retirement in tax-deferred investment accounts, such as traditional IRAs and 401(k)s. However, when it’s time to withdraw that money, we may find a sizable tax bill we didn’t fully anticipate. With the current tax rates so low, many investors are looking at converting some of their tax-deferred savings to a Roth IRA. That way, they pay taxes on their investment now but make tax-free withdrawals later (when tax rates are more uncertain). Just be sure to talk with your tax advisor before you make any moves to ensure they’re right for you.
Strategy #4: Invest in education.
If you’ve been looking for a way to help your children or grandchildren fund a college education, it may be a good time to invest in a tax-advantaged 529 savings plan. You can choose from a range of investment options with tax-deferred growth and tax-free withdrawals as long as the withdrawn funds are used for qualified educational expenses.
Strategy #5: Stay diverse in your investments.
You don’t want to put all your eggs in one basket. The beauty of a healthy investment plan is diversity – investments with long-term, short-term, and mid-range returns mixed together to help you achieve your financial goals. Now maybe the time to take a portion of your savings and invest where it can most benefit you. Talk to your financial advisor to find just the right options to keep you on track, but also give your investment plan a boost.
Strategy #6: Stay optimistic.
These are troubled times for everyone – young and old. Try your best to maintain a sense of optimism with your investment strategy and be patient with your plan. Don’t panic when the stocks drop and don’t overreact when the opposite occurs. Remember, the stock market will continue to rise and fall – that’s just how it is.
Whatever investment strategy you decide to take, do so with confidence. Investing is as simple as three steps: get advice, make a plan, and remain flexible. Get started today by talking with a financial advisor to help you create a plan that works for your financial circumstances.
To learn more about the investment options available to you at QCB, visit our Investment Center