It is hard, for everyone, to watch investments fluctuate in value. Sometimes it can be hard for investors to stay in the game. Here are a few helpful tips which can help when the stock market loses:
- You MAY get a tax break- in non-retirement accounts. While it is great to have gains, even when paying taxes on them, it can be just as sweet to realize losses to potentially create a tax neutral scenario or create a reduction in your ordinary income. Work with your tax professional and your advisor to identify opportunities and discuss how this impacts you.
- Companies might offer a sweetener- when stock prices fall companies often create enticing scenarios to attract investors. Examples may be purchasing back stock to boost earnings per share which attracts growth investors, raising dividends which attract value investors, and larger, healthier companies may opt to acquire smaller, lower performers for a good price, ultimately attracting both value and growth oriented investors.
- There's no deadline and no rush- large market declines seem to create pause for investors to ask the question, "what do I do?" For many, there is likely nothing to do, no required actions, no deadlines to meet. The reality is, you cannot time the market and you should not try. Rather, have a solid plan with investments that can accomplish your goals.
Regardless of market fluctuations there are always opportunities to consider. Work with your advisor to ensure your plan is on-track and set up for long term success!
Caroline Hill, Financial Advisor
(This article contains the current opinions of the author but not necessarily those of Brighton Securities Corp. The author's opinions are subject to change without notice. This blog post is for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. References to specific securities and their issuers are for illustrative purposes only and are not intended and should not be interpreted as recommendations to purchase or sell such securities).