The number one talk about today is without a doubt the coronavirus. Let’s now look at the coronavirus impact on mutual investments. The stock market is a huge roller coaster ride. Nothing grows eternally and many people were expecting an adjustment in the stock market this year. However, no one saw the coronavirus impact on the expected adjustment. Besides high market volatility, we have so far seen mutual funds lose around three years of gains. For many retirement funds this is a big, big hit.
Next Immediate Steps
Stock markets keep going up and down. It is a natural way of things. Right now, we’re sitting at a downturn. Will the market dip more or not? The only way you could tell for sure is if you had a crystal ball. But since you more than likely don’t have one, then you need to proceed with caution. With the mutual funds taking such a loss, it is not advisable for you to go into a panic sell off mode. If you don’t need stock market yields to survive, the best option is to leave your money in your investments.
Leveraging Losses Through Diversification
As the old saying goes, “Don’t put your eggs into one basket.” And if you followed this advice, then now is the perfect time to benefit from that. No matter how diversified your stock market portfolio is, it just took a hit across the board. The only way to leverage this hit is from a different source. We’ve discussed diversification of investment portfolio in an article on our site already. Establishment of reserve funds is a crucial part of life. If you operate on an earned income from a job, the you must develop this fund over time.
A whole life policy is an excellent tool to create this diversification. If you have an active policy with a cash balance, then now you can take tap into that policy, which if performed in the form of a loan, will not impact your policy performance. This is a a huge benefit, which can help you survive times like these.