Heritage Financial North
  • Home
  • About us
  • Services
  • Blog
  • Contact
  • Free Review

Blog

Coronavirus: What are Your Options?

3/20/2020

0 Comments

 
Picture
It’s been a volatile few weeks in the financial markets. Up until late January, we were still enjoying the longest bull market in history. In three short weeks, the bull market has ended, and we’ve entered bear market territory. Between Friday, February 21 and Monday, March 16, the Dow Jones Industrial Average has dropped by 30.37%.1
 
The rapid decline has left many investors with two questions:

  • How much further will markets drop?
  • What can I do to protect my assets?
 
There’s no easy answer to the first question. If history is any guide, eventually the decline will stop, and the markets will recover. The average bear market lasts 13 months, followed by a 22-month recovery.2 However, it’s impossible to predict when that recovery might begin.
 
The second question is even more difficult to answer. There are certainly protection options available, but not all options are right for all investors. Your strategy should be based on your unique needs, goals, and tolerance for risk. Below are a few options you have available:

Shifting to a more conservative allocation. 

Changing your allocation to a more conservative strategy is always an option. Many people become more risk averse as they approach retirement. If you haven’t reviewed your allocation in years, this may be the right time to do so.
 
Of course, a more conservative allocation could limit your participation in a recovery when it happens. Work with a financial professional to find an allocation that limits your exposure to further losses, but still gives you an opportunity to participate future upside.

Staying the course. 

Another option is to stay the course and stay invested in your current allocation. Again, that may expose you to further losses, but it could also put you in a position to take advantage of a recovery when it does happen.
 
Again, it’s impossible to predict when a recovery could happen, but history can provide some insight. The last bear market started in October 2007 and lasted until March 2009, spanning much of the financial crisis. The S&P 500 dropped 56.8%. However, the subsequent bull market (which just ended) lasted more than 10 years and saw the S&P 500 increase by more than 400%.3
 
The 2000 bear market was triggered by the tech bubble. It lasted nearly 30 months and saw a total decline of more than 49%. It was followed by a 60-month bull market with a return of more than 100%. The 1990 bear market lasted only three months and had a decline of 20% and it was followed by a 113-month bull market with a cumulative return of 417%.3
 
Bear markets are often followed by bull markets. The question is whether you can stick it out through further losses. Again, your financial professional can talk through your options with you and help you decide which path is right.

Use risk-protection vehicles. 

Another option is to take advantage of market risk-protection vehicles like annuities. There is a wide range of different types of annuities that can limit your exposure to market risk and protect your future. For example, some guarantee your principal against loss, but also offer upside growth potential. Others guarantee your future retirement income, no matter how the market performs in the future. A financial professional can help you determine if an annuity or other risk-protection tool is right for you.
 
Ready to protect your nest egg from the coronavirus? Let’s talk about it. Contact us today at Heritage Financial North. We can help you analyze your investments and implement a strategy. Let’s connect soon and start the conversation.
 
 
1https://www.google.com/search?safe=off&sa=X&tbm=fin&sxsrf=ALeKk02Fk2yPH2_A7nU0wQGE5IUIixHyGQ:1584394531365&q=INDEXDJX:+.DJI&stick=H4sIAAAAAAAAAONgecRozC3w8sc9YSmtSWtOXmNU4eIKzsgvd80rySypFBLjYoOyeKS4uDj0c_UNkgsry3kWsfJ5-rm4Rrh4RVgp6Ll4eQIAqJT5uUkAAAA&ved=2ahUKEwiBmOfJ-Z_oAhWUW80KHc2dA3MQ3N8BMAJ6BAgCEAM#scso=_SfFvXsWJMJe1tAbX6pm4BQ1:0
27https://www.cnbc.com/2018/12/24/whats-a-bear-market-and-how-long-do-they-usually-last-.html
3https://www.cnbc.com/2020/03/14/a-look-at-bear-and-bull-markets-through-history.html
 
Advisory Services Offered Through Change Path LLC, a Registered Investment Advisor. Heritage Financial North and Change Path LLC are not affiliated. Licensed Insurance Professional. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. No information on this website is intended to provide and should not be relied upon for or construed as accounting, legal, tax or investment advice. Neither Change Path, LLC not its representatives give tax or legal advice.
 
 
Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.
19926 - 2020/3/17
0 Comments

Your comment will be posted after it is approved.


Leave a Reply.

    Archives

    November 2020
    October 2020
    September 2020
    August 2020
    July 2020
    June 2020
    May 2020
    April 2020
    March 2020
    February 2020
    January 2020
    December 2019
    November 2019
    September 2019
    August 2019
    July 2019
    June 2019
    May 2019
    April 2019
    March 2019
    February 2019
    January 2019
    December 2018
    November 2018
    October 2018
    September 2018
    August 2018
    July 2018
    June 2018
    May 2018

    Categories

    All
    2020
    Benefits
    COVId
    Economic Update
    Election
    Employer Plan
    Fed Chairman
    File For Social Security
    Financial Planning
    Fourth Quarter
    FRA
    Insruance
    Insurance
    Long-term Care Insurance
    Managing Healthcare Expenses
    Portfolio
    Retirement
    Retirement Community
    Retirement Income Planning
    Retirement Planning
    Risk
    Risk Tolerance
    Social Security
    Stock Market
    Tax Planning
    Tax Tips 2019
    Volatility

    RSS Feed

Call Us Toll Free 888 579 0429
​
433 Airport Blvd. Suite 228, Burlingame CA 94010

Heritage Financial North BBB Business Review
Picture
© 2020 Heritage Financial North | Advisory Services Offered Through Change Path, LLC  a Registered Investment Advisor.
​ Heritage Financial North, Heritage Financial North Insurance Services  and Change Path, LLC are not affiliated. |  CA Insurance License # 0E02803
  • Home
  • About us
  • Services
  • Blog
  • Contact
  • Free Review