In today’s disrupted economy, it is even more important to stay in touch with your financial advisor. Conditions are changing quickly, and many people may be concerned about the fate of their investments. When the world is affected by something as life-changing as a pandemic, it is understandable that many people are uneasy about their financial well-being.
Edward Hausgen lists the reasons why it is so important for you to stay close to your financial advisor even when it feels like the rest of the world has shut down.
– Stability of Investments
The number-one concern of most investors is the drop in stock prices. Financial advisors can make recommendations as to what you should do with your investments, whether you are five, ten, or twenty years away from retirement.
For investors who are close to retirement, it is probably time to take money out of stocks and put it into lower-risk investments. This is general advice that works at all times, not just in times of severe economic hardship.
For younger investors and those who can afford it, it is important to keep many of your investments in the market. The recession will eventually end, and most of your investments will rebound. It may even be a good time to invest in some stocks and funds now while prices are low.
The exception to this rule is any company that is at serious risk of never recovering. Some companies will inevitably not survive the current climate, and investors should speak with their advisor to decide when to phase out their positions in these companies.
– Help with Budgeting
Financial advisors are expert helpers when it comes to budgeting. A good financial advisor will be able to help you determine which are the most important areas of your budget and which could use some tightening up. Sometimes a neutral third party like a financial advisor can help to bring rational decisions to the forefront.
Financial advisors can help you decide how you want to allocate your money. From the amount you want to invest to the amount you want to save, a financial advisor can tell you which money moves will bear fruit for you.
A good financial advisor can also help you set a household budget. Understanding your monthly needs and expenses requires careful thought. A financial advisor will be able to cut through the clutter and help you see what is most important.
– Paying Down Debt
Paying down your debt is one of the keys to good financial health. Today, total U.S. consumer debt is over $14 trillion. Each household carries an average of $90,460 in total personal debt including mortgages. Many credit cards have high rates and unfavorable terms, especially if you have missed payments or paid late in the past.
A financial advisor can help you decide which cards you should prioritize when it comes to paying down your debt. When your debt level is lower, you will qualify for better interest rates and you will be able to access higher lines of credit for such large purchases as cars and homes.
– Planning for an Emergency Fund
Many Americans do not have the recommended three months’ worth of expenses saved in the bank. Job loss and disruption can happen to anyone, as evidenced by today’s serious jump in the unemployment rate.
If you are just beginning to save for an emergency fund, a financial advisor can help you determine how much you need and how you should fit saving for it into your monthly budget.
– Going Through Life Changes
If you are going through life changes, including losing a job, getting married, buying a house, having a baby, starting a business, or caring for aging parents, it is important to sit down with your financial advisor. Your advisor can help you decide at how to adapt your finances to fit your new life situation.
Financial Advisors are for Everyone
Edward Hausgen reminds consumers that it does not matter how much money you have in the market when it comes to hiring a financial advisor. They are willing to work with people with small investments as well as people with large portfolios.
This is also a good time to engage the services of a financial advisor for the first time. Financial advisors have helped their clients weather recessions and depressions before, and they are ready to do so again.
In these challenging and ever-shifting economic times, it is doubly important to keep a good relationship with your financial advisor.