Invested in Recovery

Invested in Recovery

Why there’s good reason to be optimistic about your financial future.

As federal and state officials scramble to govern the public health needs associated with the COVID-19 pandemic, they are doing so while simultaneously managing a financial crisis as well. With record unemployment, shuttered businesses and plenty of uncertainty in the marketplace, stimulus packages and grant relief programs can only go so far in repairing the damage done. 

Despite this, it’s not all doom and gloom in the financial world. In fact, we spoke with some local money managers who are quick to assure investors that there is indeed light at the end of the tunnel. And while they can’t predict when things will turn a corner, there remains great optimism that now is a great time to solidify your financial future by making prudent decisions that can have a long-term positive outcome.
 
“Our theme in these circumstances is and always has been: Don’t panic,” says Stan Molotsky, founder of SHM Financial Group. “Have a plan, stick to the plan, protect your assets and know your tolerance. You absolutely must have exit strategies in case certain things don’t work out the way you think they are going to.
 
“And make sure you have dollars available to take advantage of opportunities if and when they present themselves. You always want to double check and make sure what your risk tolerance is and what you are able to withstand. There are always tremendous opportunities.”
 
With most clients invested for the long term, there’s an understanding that market volatility is not a one-time event. According to Ted Massaro, chartered financial consultant with M Financial Planning Services, resilient financial advisors can help their clients move past the endless barrage of negative headlines.
 
“We help clients understand that their portfolio is being managed toward their dedicated financial goals and time horizon so they can feel comfortable weathering the storm,” says Massaro.
 
Of course, with every opportunity there’s an inherited risk and there’s been some misconceptions about what the current marketplace is presenting to investors. Those who believe now is the time to get rich quick could wind up paying a hefty price down the road.
 
“Headlines and surging stock prices create a common misconception for investors who many times will begin what I call FOMO (fear of missing out) investing. This typically leads investors to take substantially higher risks with their portfolios than their financial goals warrant, and often times can lead to disastrous effects,” says Anthony Massaro, CFP, M Financial Planning Services.

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Like the rest of the world, money managers are learning to adapt on the fly while still providing quality service that clients have come to expect. While the news on the pandemic is constantly evolving, the ebbs and flows of the marketplace are also constantly on the minds of clients who are now relying on their advisors heavily and in real time.
 
And that means not only trying to navigate through these murky waters, but looking far enough down the line to be able to make informed decisions. While the news on the virus can cause fluctuation on Wall Street, there are plenty of other factors that can help drive the nation’s economy, not the least of which will be the upcoming presidential election this November.
 
“Believe it or not—it’s impossible for most people to comprehend [with everything going on]—that there will be an election in a few months. And a presidential election will cause waves no matter who wins. The economic situation will be different and you have to anticipate that and be prepared for changes that may possibly occur,” says Molotsky.
 
An individual’s ability to withstand a downturn is largely dictated by their place in life. The younger an investor is, the more flexibility they have because they have earning years still in front of them. Those closer to retirement would be advised to be slightly more cautious and direct their money into investments that are more predictable. Of course, the larger amount of cash flow that someone has, the more risk they are able to tolerate.
 
Whether planning for their children’s college funds, retirement or simply looking to build their portfolio, helping clients find ways to reach their financial goals so they can enjoy their golden years the way they always envisioned is one the most rewarding aspects of the job for Molotsky. “I look forward to this. … I love this, trying to anticipate what’s going to happen,” he says of the challenge.
 
Ted Massaro urges investors to focus on their financial goals and not the outside noise. “Greed and fear are what drive us to make poor investment decisions,” he says. “When you begin to consider dramatically changing your investment plan, first ask yourself why you had invested the way you did originally. If the story hasn’t changed, your portfolio likely shouldn’t either.”
 
 
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Published and copyrighted in South Jersey Magazine, Volume 17, Issue 5 (August 2020).

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Author: Peter Proko

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