“Peace is not the absence of storms, but enduring them and still having calm in your heart.”
What do you do if you are driving and it starts raining? Maybe you drive a little slower. Maybe you turn on the windshield wipers and the headlights.
How about a flat tire? Do you have a membership with AAA? Do you have a spare? Do you know how to change it?
Cars are equipped with the needed safety features to navigate weather and road hazards.
The same is true with your retirement plan.
It should be built to withstand potholes, flat tires, and rain. It does not mean your account value won’t go down; it means that you are still on track to meet your retirement goals.
We discussed emotions and investing in FFF #208 and #209.
Now let’s discuss the actions you can take in a down market.
- Tax loss harvesting
- Contribute/invest more
- Rebalancing your investments (which can buy more stocks that are down and keep your overall allocation intact)
- Do Roth Conversions
- Temporarily be slightly more aggressive
- Use cash buffer and/or bonds for income
- Reinvest dividends instead of cashing them out
These actions are the equivalent of changing the flat and turning on the wipers.
If you are a client, we do this for you.
We drive the limo.
Your job is to sit back, live your life, and enjoy the view.
Should you claim Social Security at 62? Watch now to see if it’s the right choice for you!
