Watching a volatile market fluctuate each day can create a sense of apprehension. But an uncertain market situation can also be a golden opportunity to make lemonade out of the lemons the COVID-19 and Market are dealing us. Below are 7 practical things you can do to survive and thrive in uncertain or volatile market conditions.
- Roth Conversion…while the values are low
It is less expensive for many investors to convert retirement savings from pre-tax to Roth accounts because of the recent stock market selloff. The strategy involves converting all or a portion of a traditional, pre-tax retirement account — such as a 401(k) plan or IRA — to a tax-free Roth IRA. In order to do the conversion, investors would opt to pay income tax now, while markets are down and tax rates are lower. This could be a huge opportunity for many, depending on your income and marginal tax bracket.
- Buy Low—Invest Now: It’s a great Buying Opportunity
Everyone likes a good deal and no one would go shopping at a store and look to pay more, right? The same holds true during a volatile market. When stocks lose their value, they are a valuable buying opportunity! You don't have to change your investment strategy at all. Just continue to invest as you have been or if you have available cash sitting on the sidelines, consider putting it to work!
- 5 Uses of Money (Ron Blue)
Honor God with your finances. Keep healthy financial priorities. Ron Blue has stated that there are five uses of money, in this order of priority: Giving, Taxes, Debt, Lifestyle, and Savings. When we continue best financial practices, we will find ourselves thriving in the midst of an economic downturn.
- 6 Transcendent Financial Principles (Ron Blue)
Thrive in the midst of an economic downturn with timeless financial principles you cannot live without:
- Tax Loss Harvesting
A loss is not the end. When there has been a loss, you can sell a security in your taxable account to take a tax benefit this year and buy a similar security at the same time to replace the one you sold to maintain your position in the market. There are rules around this maneuver, but it can be one way of turning lemons into lemonade!
- Be a Blessing to others and…be Generous!
Generosity during financial downturns can make a big impact. If you have plenty of financial resources, give your $1,000 from the Government to a family or individual that needs it more than you do. Imagine if every family who didn’t need this stipend from the government gave their $1,000 or $2,000 to someone among their family, friends, church or community who truly does need it (think of the single parent, elderly person living on a fixed income, a person whose job has been severely impacted by the crisis, such as your hair stylist, restaurant server, etc.).
- Tip Extra Generously
There are many service industry occupations where the majority of the person’s income comes from tips (Uber or taxi driver, DoorDash or pizza delivery, hair stylist, restaurant servers, etc.)
When we refrain from panicking, we can make some level-headed investment decisions that put us ahead of where we thought we would be and in a position to bless others. When you have opportunity, look to the needs of others. As Jesus said, “It is more Blessed to give than to receive.”
Here is a good word of encouragement from the Apostle Paul:
“And God is able to make all grace abound to you, so that having all sufficiency in all things at all times you may abound in every good work. As it is written, ‘He has distributed freely, he has given to the poor; his righteousness endures forever.’ He who supplies seed to the sower and bread for food will supply and multiply your seed for sowing and increase the harvest of your righteousness. You will be enriched in every way to be generous in every way, which through us will produce thanksgiving to God.” —II Corinthians 9:8-12 (ESV)
God has not blessed us so we can just hoard what we have been given…He has blessed us so we can become a blessing to others; a “Conduit for His Kindness".
Here is a music video that many of you have heard (and loved) as I have called “Blessings” by Laura Story. This sums up how I feel about the Blessings I’ve been given by the Lord and this song is my prayer for you and all those you love and care about. Please watch, listen and read the lyrics…be Blessed…and then be a Blessing to others! https://youtu.be/F5Opv5AZT3w