Take the Long View

During times of uncertainty, it can be hard to take a long-term view of your finances. You’ve likely heard the guidance to keep investments in the market for the long run, despite poor short-term performance that may tempt you to sell to cash. But knowing we should leave our retirement savings alone during the market’s down days and actually doing it can be difficult—especially when you may feel helpless and want to do something.

Letting your investments ride out the storm does not mean you should sit on your hands. There are smart actions you can consider taking now that are likely to improve your financial situation for years to come:

1. Add to your retirement savings

   • If you can increase what you’re saving monthly to your retirement savings (even by a small amount) now is a great time.

   • When you look at the stock market, think of the “red” you see as a widespread price reduction at your favorite retail store. Things are on sale. If you can increase your savings incrementally now, it will benefit you in the long run.

   • The same is true for excess cash on hand. Assuming you have an emergency fund already in place, if you have additional cash available, consider adding it to your nest egg investments now.

2. Delay large purchases that would require you to withdraw from your nest egg

   • If you’re planning a purchase that would require you to withdraw from your investment portfolio (selling investments that are down), put it off if at all possible. Delaying the purchase until the market has recovered is in your long-term best interest.

3. Consider a refinance

   • Interest rates are at historic lows. If you have a mortgage and plan to be in your home for the foreseeable future, a refinance may be worth considering. Such a move could increase your monthly cash flow allowing for increased retirement savings (see number 1 above) or additional principal payments, which will allow you to pay off your mortgage sooner than planned. But remember—use the freed-up cash flow for your future, not for your next Amazon purchase. Additionally, it's important to carefully consider the fees associated with a refinance.

4. Financial plan adjustments

   • If you’re near or in retirement and the market volatility continues, an adjustment to your plan may be the best long-term decision, even if it causes temporary pain. Meaning, reducing your spending for a period of time, picking up some part-time work (to reduce nest egg withdrawals) or delaying a purchase (see point 2) may be in your long-term best interest.

Making some of the adjustments above, or simply looking into them, will help you feel like you are doing something at a time when it’s difficult to do nothing. If you feel that a professional opinion would be helpful, talk to your financial advisor or seek out a fee-only CERTIFIED FINANCIAL PLANNER™ for guidance. 

Read Melissa's article in West Knoxville Lifestyle's July issue here.

The opinions expressed are those of PYA’s Investment Team. The opinions referenced are as of the date of publication and are subject to change due to changes in the market or economic conditions and may not necessarily come to pass. Forward-looking statements cannot be guaranteed. 

PYA Waltman Capital, LLC (“PYA”) is an investment adviser registered with the U.S. Securities and Exchange Commission. Registration does not imply a certain level of skill or training. More information about PYA’s investment advisory services can be found in its Form ADV Part 2, which is available upon request. PYA-20-34