Saturday, November 27, 2021

Embrace the Confusion

Ask the CFP

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If Confusion is the First Step to Knowledge, I Must Be a Genius. Lawrence Leissner (1951-2019), American Author 

Question: What are your suggestions on how to prepare for our year-end financial review and planning in light of the COVID-19 nightmare?  

Answer: There’s no doubt that 2020 has turned our lives upside down. While not minimizing the impact of the catastrophes we’ve been forced to deal with, there are a few positive powerful, positive opportunities with potential upsides that we can look for amid the confusion.  

There is still economic activity and we’re still spending; it’s just changed to some degree. With travel plans on hold, grocery bills have increased. More than a third of Americans admit to indulging in retail therapy as we’ve built-out our cocoons.  

Household incomes are also shifting, with many unemployed and others facing pay and bonus cuts. What we can focus on is what can control, and one consequence of these changes is that most of us are driving less. In addition, we may be better poised to go without nonessential items and discern between “wants and needs.” If you’ve been doing without a product or service and you don’t miss it, it might be time to direct that money elsewherelike maxing out your 401(k) if you’re in a good place financially.  

Emergency funds exist for time just like this. If you’ve had to dip into it for necessary expenses, don’t panic. When you’re able to, don’t forget to replenish those funds, even if it’s just a little at a time.  

The twists and turns of the market can unbalance a desired mix of stocks, bonds and cash. If your portfolio seems out of sorts, it may be appropriate to consider rebalancing strategies to match your risk tolerance and timeline.  

This may be the year to consider tax-loss harvesting by selling losing investment to offset capital gains, either now or in the future. If you’re interested in maximizing your philanthropic gifting, this is the time to speak with your trusted team of financial professionals, including your CERTIFIED FINANCIAL PLANNER professional, about available strategies 

This year has certainly tested our abilities and highlighted the importance of collaboration. The good news is that you’re not alone when it comes to navigating the markets and safeguarding your financial well-being. As we head into the end of the year, work closely with your advisor to help you find a sense of order amid the uncertainty. Stay focused and plan accordingly. 

Food for Thought: New U.S. Spending Habits 

  • 67% are spending more on groceries 
  • 70% are spending less on travel 
  • 49% are spending less on clothing  
  • 35% have made an impulse buy to deal with stress 
  • 64% say their spending has changed permanently 

Number 1, the process of rebalancing may result in tax consequences. Number 2, unless certain criteria are met, Roth IRA owners must be 59½ or older and have held the IRA for 5 years before tax-free withdrawals are permitted. Additionally, each converted amount is subject to its own 5-year holding period 

Source: Fact Set the S&P 500 is an unmanaged index of 500 widely held stocks that is generally considered representative of the U.S. stock market. The NASDAQ Composite is an unmanaged index of securities traded on the NASDAQ system. It is not possible to directly invest in an index. There is no assurance the trends mentioned will continue or that the forecasts discussed will be realized. Past performance may not be indicative of future results. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct. The opinions expressed are those of the writer as of September 9, 2020, but not necessarily those of Raymond James and Associates, and subject to change at any time. All information provided herein is for informational purposes only and is not intended to be, and should not be interpreted as, an offer, solicitation, or recommendation to buy or sell or otherwise invest in any of the securities/sectors/countries that may be mentioned. 

“Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER™, CFP® (with plaque design) and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements.” This article provided by Darcie Guerin, CFP®, First Vice President, Investments & Branch Manager of Raymond James & Associates, Inc. Member New York Stock Exchange/SIPC 606 Bald Eagle Dr. Suite 401, Marco Island, FL 34145. She may be reached at 239389-1041, email Website:


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