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Lemonade from Lemons

Here are some actions to consider.

  • Roth conversions – If you are in a low tax bracket currently and have significant tax deferred assets in IRA’s, now might be a good time to convert shares of depressed assets to reap future growth in a tax free account.  
  • Clean up positions – if capital gains kept you from selling off positions in taxable accounts, now might be a good time to clean house with minimal tax implications.  You have to be aware of wash sale rules and I would not advise changing your overall strategy and getting out of the market.  I am identifying trades to go back in so as not to miss the ride back up that will eventually come.
  • Rebalancing – the market moves have changed your asset allocation. We don’t know where the bottom will be but gradually rebalancing back to your original target allocation should yield long term gains.  I suspect we will look back at this time as a fearful time and a good sale on equities.   

Remember, money in stocks should never be money you need in the next 3-5 years.  We always have a buffer in bonds and cash.  It’s important now, more than ever to have a plan in place.   A healthy balance sheet and projections that are stress tested annually make this a much easier situation to endure.   

Of course, I don’t know your individual situation unless you are a client. If you are a client, I’m already working on these ideas and I’m happy to go over my thoughts with you.   If you aren’t a client, then these are simply some ideas to consider that may or may not apply to you.   If you need assistance, and want to look at doing your own planning, let me know.     Stay healthy and safe.   Be in touch if I can help you.