Ep 32: Coronavirus Market Update + Where to Go From Here
Now that we’ve had a little time to process what we’ve been seeing in the stock market, let’s get an update from Mike on where we stand, how clients are handling everything, and what the next steps need to be for your finances.
The Reality of the Matter:
Nearly two months have passed since the Dow hit an all-time high and that time has been highlighted by steep drops and extreme volatility.
The fear surrounding the coronavirus pandemic and the uncertainty over how long it could impact our nation caused a lot of panic in the market. So much so that the rapid selloff in March happened with unprecedented quickness. For some perspective, we saw a similar drop during the crash of 2008 but that took around a year. This happened in about four weeks.
Now people are trying to process what we’re witnessing while sorting out their own finances, and it can be a difficult time for a lot of people. But better days are ahead and try to remain focused on where to go from here.
That’s part of our goal for this episode of the Retirement Reality Podcast. Mike Kojonen will provide us with some perspective on what we’re seeing and how the market became so volatile in such a short period of time. As we continue working with clients virtually, we will share some of the conversations we’re having and give you a sense of how everyone is dealing with this.
You’ll find that a strong financial plan can completely change your mindset in times like these because you can trust that your portfolio isn’t facing the same fate as the market. We’ve had people lose as little as 2% to their entire portfolio despite the market falling around 35% on average.
We’ll use this show to talk about what those people with strong plans can still be doing to make adjustments and improve their position. Is there an opportunity to increase contributions and take on a little more risk in the stock market right now? Potentially and we’ll use 2008 as an example for that.
And what about people without a financial plan? Many individuals have been investing on their own during this recent bull run but have to re-evaluate where they stand and where they want to go. We’ll share some steps to take as you look to rebuild and move forward.
1:16 – How is Mike and his team dealing with the quarantine?
2:43 – Mike’s usual seminars are on halt but virtual seminars are starting.
4:21 – Getting to Know Mike: What’s dumbest or most foot-in-mouth thing that you’ve ever said?
5:45 – Let’s turn to the market and get Mike’s perspective on what we’ve seen over the past two months.
7:44 – How have your clients handled everything so far?
9:36 – What about someone with a solid financial plan already, what adjustments can they be making?
12:07 – If you have the ability, now is the time to increase your contributions.
13:36 – It’s difficult in the moment to trust the process but look at some of the values out there.
15:26 – What about the people without a plan in place? What are their next steps?
17:37 – Mailbag Question #1: I haven’t wanted to pay off my house but I have the money to now so should I?
19:46 – Mailbag Question #2: I’ve heard I should be saving about 10% of my income towards retirement? Is that right?
Thanks for checking out the Retirement Reality Podcast. We’ll talk to you again next week.