Our team believes in providing advice to promote the well-being of a comprehensive, long term investment plan. Below are a few action items we ask our clients to review during times of increased market volatility and historically low interest rates.
- Review your 401k allocations. With recent volatility, your asset allocation within your employer sponsored plan may not be aligned correctly. It is important to review current and future allocations to match up with your long-term financial goals.
- Look to increase contributions into employer sponsored plans / other investment vehicles. Investing over a period of time can provide the benefit of buying shares of a company at a better valuation when the stock market is lower. We believe that now is not the time to cancel or reduce 401k/403b/TSP contributions.
- Review your cash reserves. If they are too high, consider investing some of these funds at more appealing valuations. Always maintain enough cash in savings for a rainy day.
- Consider making 529 contributions. Saving for a child’s education at these lower levels can be beneficial. Remember, money saved in a 529 account is withdrawn tax free if used for a qualified educational expense.
- Consider a Roth conversion. Converting traditional pre-tax IRA money to a Roth can be beneficial to your future and current financial plan. Once money is converted and taxes are paid, all growth in a Roth IRA is withdrawn tax free after age 59 ½.
- Consider utilizing some tax loss harvesting to offset gains in concentrated positions. Take some losses to pair up with gains you have with long-term concentrated positions. You can then diversify these positions to better position yourself for long-term investment success.
If you have any questions or need help in implementing these action items, do not hesitate in contacting our team of financial advisors.
Chris Hall, Managing Principal
Wells Fargo Advisors Financial Network and Hall Financial Advisors, LLC are not legal or tax advisors.