Investment Tips for an Uncertain Market

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By Matt Kelly

At the end of January, the Dow Jones Industrial Average capped off another record-setting month of growth, settling in around 26,600 points. Just a week into February, and the market had shaved off nearly 2,000 points as analysts began to question whether the bull market had finally slowed to a halt and whether we were in for a correction, recession, or more.

Now, investors find themselves quickly fluctuating between rapid sell-offs and frenzied buying sprees, uncertain about the more long-term economic outlook.

Of course, it’s not advisable to simply liquidate your assets and keep it all as cash under your mattress just because the stock market is volatile. Instead, this is a good point to calmly evaluate your needs, your long-term goals, and consider tweaking your investment strategy to make sure you don’t waste any time growing your portfolio.

While you should never make an investment without first consulting your advisor, here are a few tips to help steer you in the right direction.

You don’t need to abandon the markets entirely: Even when the markets suffer huge losses, there are still plenty of successful companies that weather the storm. You don’t need to pull all your savings from the stock market, but you do need to address whether or not your portfolio is diverse and conservative enough to be protected from a bear market.

Check out indexed and whole life insurance policies: Not only is life insurance an important component of your family’s financial planning, it can also act as an investment vehicle depending on the type of life insurance you procure. A whole life insurance policy will provide you with extra cash every time you pay your premiums. Indexed policies use that cash value and invest it into accounts tied to an index like the S&P 500. They have a floor of zero, meaning that you won’t lose money in a bad year, but still retain upside potential.

Consult with your financial advisor: Watching the stock market go up and down can be more emotional than an Oscar-nominated drama. And if you’re emotional, you may not be making sound financial decisions. Consult with your financial advisor before making any sudden changes to your investment strategy. This will ensure that your goals, and your financial needs, are both working in conjunction to secure your future and maximize your wealth.

To learn more about the savings opportunities available to you, stop by any office of The Milford Bank in Milford or Stratford, or check out our Online Learning Center here.

The Savings Spotlight Series, Part 3: Mid-Career Planning

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By Chaz Gaines

In the Savings Spotlight Series, we’ve made the case that there are numerous stepping stones throughout our lives that lead us down the path to financial well being. At every point, you’ll need to take a different approach. A teenager, for instance, might be saving for their first car. An individual nearing retirement is going to have a drastically different goal, and method, for reaching their savings objective.

Already in this series, we’ve provided useful savings tips for both first-time banking customers and recent college graduates. In Part 3 we’re going to fast forward a decade or two along our path to retirement, focusing in on the savings needs of individuals in the middle of their careers.

Maximize employer benefits: Most of the businesses that offer retirement benefits will no longer contribute after you’ve left the company. Now, nearing the height of your earning power, you should be doing all you can with the remainder of your working years to take advantage—especially if your employer will match your contributions.

Balance retirement and college funds: Many individuals at this stage in their lives must reconcile the need to have a forward-thinking retirement-oriented saving strategy while simultaneously helping their children get started on their own path. It can be challenging, but your focus when crafting a budget and savings strategy should balance both.

Bolster your emergency account: Many individuals at this stage in their working life have been at their jobs for twenty years or more—making them feel quite secure. But sometimes, business decisions are out of our control, and many families get blindsided by that false sense of security. Even if you expect success, a failure to keep an emergency cash account funded could put your family at risk. Many experts believe you should have at least six to nine months salary readily available in case of emergency.

Expect the unexpected: Just like it’s important to plan for emergencies throughout your life, it’s important to plan for the end of your life too. If you were to pass away today, your grieving family would still have to keep paying the mortgage, fund college accounts and plan for retirement—all without your income. While this is a sensitive matter in which thinking about money should be secondary, it’s nonetheless a reality that your family will have to cope with. Securing life insurance will provide the coverage your family will need in the event that the worst comes to pass. Some policies, like whole life insurance, even have features to assist with your savings goals.

Shift investments to meet changing goals: Every investment vehicle offers a unique benefit. So if your financial goals are shifting, shouldn’t your savings strategy? When we’re young, we have more ability to rebound from a risky investment. We also have more time to let a certain, conservative investment grow. Now, in the middle of your working life, it’s important to take a moment to reflect on whether the vehicle that got you this far is going to be the vehicle that gets you all the way to the finish line, or if it’s time to trade in.

To learn more about crafting the best saving strategy for you and the needs of your family, check out our Online Learning Center or stop by any office of The Milford Bank in Stratford or Milford today.