Connect with us

Business

5 Investing Considerations in a Falling Stock Market

5 Investing Considerations in a Falling Stock Market

 


Throughout 2022, each day seems to bring more bad news for the US stock market. Since the beginning of the year, more investors are facing the end of 2022 with investment losses. What do you do when the stock market goes down?

1. Resist the urge to panic.

Discuss your concerns with your wealth management advisor. It’s your money, and they’re there to guide you. In general, you will want to ride out this market downturn and resist the urge to sell.

If you are considering exiting the market, be very careful. There are numerous studies that show that even modest periods of market absence can have a significant impact on long-term returns simply by missing one or two best days of the year.

2. Implement a tax loss collection strategy.

Tax loss harvesting is a portfolio management technique in which we sell an investment at a loss for tax planning purposes. Capital losses can be used to offset other capital gains or written off (up to $3,000 per year) on your tax return. Any excess is carried over to subsequent years.

Rather than staying out of the market after the sale, you want to buy back another investment that is not the same security that was sold. This maintains your investment exposure and avoids wash sale rules.

3. Assess portfolio rebalancing.

Typically, when investing for the long term, investors have a strategy in place to allocate funds to a specific mix of investment vehicles. For example, 50% of your investment dollars are in stocks and 50% in bonds.

With these objectives in mind, we seek to rebalance to take advantage of market moves and maintain allocation. Generally, in a bearish stock market, high-quality bonds tend to hold their value or even rise. This year is particularly difficult as many bonds are also down, although in many cases not as much as stocks. Despite this, be sure to assess your situation. There may be opportunities to make some adjustments to best position yourself for an eventual market rally.

4. Consider your year-end tax situation.

When your investments generate more income and capital gains, they can put you in a higher tax bracket. This year, you could find yourself in a lower tax bracket. We always review our clients’ expected tax position before the end of the year to assess planning opportunities. This year is particularly important to do so. We’ll want to assess how to take advantage of your low income by converting an IRA (which is taxed when the money is taken out) to a Roth IRA (which is taxed when you contribute to it).

5. Watch your cash reserves.

If you have excess cash beyond your protective cash reserves that you won’t need soon, you’ll want to evaluate their investment in the market. When we look at data going back to the 1980s, history shows that when the market recovers from periods like this, it does so at levels well above average. Although it is difficult to know when a market has bottomed out, these types of market conditions present opportunities for long-term investors.

Bonus: Evaluate your behavior as an investor. When a person sets up their investments for the first time, they may overestimate the level of risk they are comfortable taking.

However, how you are handling this current market downturn offers great insight into your true risk tolerance. It helps you understand what it’s like to experience loss, uncertainty and fear.

If you’re not sleeping well, worried about your wallet, or thinking about withdrawing money, you may have taken more risk than you think. This knowledge helps you to be proactive in setting up your investments more appropriately in the future, before the next market drop.

• Brian M. Niksa, CFP, is Partner, Senior Wealth Advisor at Capstone Financial Advisors.

Sources

1/ https://Google.com/

2/ https://www.dailyherald.com/business/20221127/5-investment-considerations-in-a-down-stock-market

The mention sources can contact us to remove/changing this article

What Are The Main Benefits Of Comparing Car Insurance Quotes Online

LOS ANGELES, CA / ACCESSWIRE / June 24, 2020, / Compare-autoinsurance.Org has launched a new blog post that presents the main benefits of comparing multiple car insurance quotes. For more info and free online quotes, please visit https://compare-autoinsurance.Org/the-advantages-of-comparing-prices-with-car-insurance-quotes-online/ The modern society has numerous technological advantages. One important advantage is the speed at which information is sent and received. With the help of the internet, the shopping habits of many persons have drastically changed. The car insurance industry hasn't remained untouched by these changes. On the internet, drivers can compare insurance prices and find out which sellers have the best offers. View photos The advantages of comparing online car insurance quotes are the following: Online quotes can be obtained from anywhere and at any time. Unlike physical insurance agencies, websites don't have a specific schedule and they are available at any time. Drivers that have busy working schedules, can compare quotes from anywhere and at any time, even at midnight. Multiple choices. Almost all insurance providers, no matter if they are well-known brands or just local insurers, have an online presence. Online quotes will allow policyholders the chance to discover multiple insurance companies and check their prices. Drivers are no longer required to get quotes from just a few known insurance companies. Also, local and regional insurers can provide lower insurance rates for the same services. Accurate insurance estimates. Online quotes can only be accurate if the customers provide accurate and real info about their car models and driving history. Lying about past driving incidents can make the price estimates to be lower, but when dealing with an insurance company lying to them is useless. Usually, insurance companies will do research about a potential customer before granting him coverage. Online quotes can be sorted easily. Although drivers are recommended to not choose a policy just based on its price, drivers can easily sort quotes by insurance price. Using brokerage websites will allow drivers to get quotes from multiple insurers, thus making the comparison faster and easier. For additional info, money-saving tips, and free car insurance quotes, visit https://compare-autoinsurance.Org/ Compare-autoinsurance.Org is an online provider of life, home, health, and auto insurance quotes. This website is unique because it does not simply stick to one kind of insurance provider, but brings the clients the best deals from many different online insurance carriers. In this way, clients have access to offers from multiple carriers all in one place: this website. On this site, customers have access to quotes for insurance plans from various agencies, such as local or nationwide agencies, brand names insurance companies, etc. "Online quotes can easily help drivers obtain better car insurance deals. All they have to do is to complete an online form with accurate and real info, then compare prices", said Russell Rabichev, Marketing Director of Internet Marketing Company. CONTACT: Company Name: Internet Marketing CompanyPerson for contact Name: Gurgu CPhone Number: (818) 359-3898Email: [email protected]: https://compare-autoinsurance.Org/ SOURCE: Compare-autoinsurance.Org View source version on accesswire.Com:https://www.Accesswire.Com/595055/What-Are-The-Main-Benefits-Of-Comparing-Car-Insurance-Quotes-Online View photos

ExBUlletin

to request, modification Contact us at Here or [email protected]