A COVID-19 Action Plan, and How the Stimulus Bill Can HelpBudgeting/Financial Planning/Goals Financial Planning for Unique Situations
To say that these are hectic times would be a gross understatement. Not only is every American enduring the effects of the COVID-19 epidemic, but the entire world is as well. Fear, uncertainty and doubt have filled the homes of billions of people around the globe. We are not alone.
While proactively protecting the health of your loved ones and yourself is not to be taken lightly, there are specific actions that may add fuel to the fire if made. Unfortunately, we’ve seen this happen far too often. In our experience at Align Wealth Partners, we also know that, while much of what is going on right now is out of our control, there are things you can do right now that can help the overall situation.
What to Do
- Look at history – what have historical bear markets shown us?
- Talk with your financial advisor – sticking your head in the sand is not the solution.
- Stay healthy.
- Stay informed.
What Not to Do
- Don’t panic.
- Don’t sell out of fear.
- Don’t make emotional decisions about your finances on your own – talking with a financial professional can help you remember your long-term goals.
In times of agony and distress, arguably, the most beneficial thing we can do for our family and ourselves is not to panic. Fear is said to be the strongest emotion known to humanity. Fear can make any situation worse than it is due to irrational thinking, which leads to taking irrational actions. When it comes to your finances and your future, this kind of emotional decision-making can be devastating.
It’s important that we don’t make permanent decisions based on a temporary situation. This does not mean that you should be dismissive of the current state the world is in, nor that you should try to brush it off. However, being able to set your sights on a period of time that is just a few weeks or months away can save you years of hardship and regret. Businesses across the nation have come to an abrupt halt. As a result of this, the stock market gains accumulated over the past 10 years have taken a major hit.
With the sea of red that has engulfed our market, the thought of selling is and has been at the front of the minds of many. But the reality is that no one truly knows what the market will do next. Some believe that we’ve hit the bottom, while others feel differently.
The truth about the markets and trading is that if you weren’t able to trade before the trend changes, then you are more than likely better off holding until it reverses again if you are not an active, professional trader. Trying to time the market has cost people more money than it has made them.
Contact us. The financial advisors at Align Wealth Partners are here for you, whether you’re a current client or not.
History Repeats Itself
A look back through American history will reveal the fact that after every recession, dip or downfall in the market, a bull market follows. As we know, the market moves in cycles of bull and bear trends. Remember, you haven’t lost anything if you haven’t sold anything. While the value of a portfolio may show a significant loss, that loss isn’t a loss until it is realized, or the stock sold.
And then we have the other end of the spectrum – the people who grasped these times and sought out opportunities to expand and to grow instead of contract. The optimistic and risk-calculated individuals who emerged with new levels of wealth after the bear market ends will likely be in better shape.
Discuss your specific situation with a financial advisor you trust before making any decisions about your financial plan.
Talking with a Professional
All the time spent meeting and planning with your financial advisor over time has its purposes.
While no one can ever predict the future, your financial advisor is a trained professional on how to handle different market situations. A financial advisor can help you quiet the chatter and opinions, and help you focus on what it is that you really need to know.
Talking with a fiduciary financial advisor can many times bring a sense of peace despite the market conditions.
Remember, we are being affected by this pandemic just as you are. We also have family, friends and personal assets invested in the market. At Align Wealth Partners, we can relate to what you’re going through, not only on a financial level but on an emotional level as well. We’re here for you during these unprecedented times and want to share other methods of financial relief that can aid your family in these uncertain times.
How the Stimulus Bill Can Help
With the recent passing of the $2 trillion stimulus package comes financial assistance in many forms. (Yet another reason to speak with your financial advisor – a fiduciary financial advisor has a legal responsibility to put clients’ best interests first and should be up-to-date on these programs and which would best apply for you and your situation.) Below are just a few of the programs available through the recent passing of the stimulus package.
- Mortgage Forbearance: The CARE Act, which falls under the stimulus package, allows homeowners who meet specific qualifications to apply for mortgage forbearance. This allows a homeowner to defer their mortgage payments for up to 12 months.
- Extended Tax Deadlines: For those who may end up owing money on their taxes this year, the deadline for filing has been pushed back from its original deadline of April 15 to July 15.
- SBA Loans: The Small Business Association (SBA) is offering Express loans, which are traditional seven-year loans with fixed low rates and payments deferred for the first six months. Also, for businesses with current non-disaster loans with the SBA, the SBA will cover your payments, including principal, interest and fees, for six months.
- PPP: The Paycheck Protection Program (PPP) offers small businesses relief via the way of 0.5 percent interest rate loans up to $10 million. This is to provide aid for small businesses in helping them cover payroll expenses, rent, insurance and more. If a business meets specific qualifications, this loan can be considered a grant and deemed forgiven or no payments required.
- Student Loan Forgiveness: Americans who are carrying student loan debt are also receiving assistance. All student loan payments have been deferred until September 30, 2020. Recent legislation that was approved requires at least 120 payments on student loans. Another great part about this period of deferred student payments is that they count toward the balance of 120 payments.
*The content provided herein is based on our interpretation of the CARES Act and is not intended to be legal advice or provide a tax opinion. This document is a summary only and not meant to represent all provisions within the CARES Act.
With social distancing in full effect, it may not be a bad idea to also keep your distance from social media, or at least limit your time spent engaging in social media activities. Our mental health is just as important as the condition of our physical health (some argue that it’s even more critical). Stress, worry and anxiety can weaken the immune system. This may be an excellent opportunity to finish or start reading that book you have promised yourself you would.
A healthy mind often creates a healthy attitude. A healthy attitude can encourage healthy actions, which is contagious. While most are looking toward the stimulus for financial aid, your family and friends may be looking to you for emotional assistance and support. If you’re looking for someone to lean on, contact the financial advisors at Align Wealth Partners. We’re here for you.
If you have any questions, please don't be hesitate to reach out.