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Tuesday April 28, 2020

April is Financial Literacy Month: Time to Consider Your Investment Strategies, Strengths and Weaknesses

April is financial literacy month, and in the current economic environment, it’s not a bad idea to close it out with a look into your financial health. Whatever your tax bracket, it’s likely that the COVID-19 pandemic has forced some serious discussions, financial and otherwise, to bubble up around your family dinner table.

Do a retirement planning “check-up”

The last time you sat down and did a “check-up” with your financial advisor, the markets were probably much different than they are now. Figure out exactly where you stand financially and whether you’re meeting your retirement goals.

Have you maximized your 401(k) or IRA contributions? With the recent passage of the CARES Act, you now have some extra time to maximize your contributions for 2019, as the tax deadline has been extended from April 15 to July 15.

Stay invested but proceed with caution

Prior to the pandemic, you and your financial advisor most likely mapped out a well-thought-out investment plan with your investments spread out across a range of opportunities. Of course, every investor’s circumstance is unique, but as a long-term investor it’s best to stay the course in the current market environment. Keeping on track with contributions to retirement accounts during a downturn can still reap positive returns in the long run, as you can acquire more shares of investments at a lower price.

Reexamine your investment strategy

If you’re feeling uncomfortable with any of your current equity investments, it might be time to revisit  your asset allocation strategy. MarketWatch suggests that if your retirement accounts are more than 10 percent off target, you may want your financial advisor to rebalance some of them and adjust the mix.

If you have never done so before, consider an actively managed portfolios, like WISDM, B. Riley Wealth Management’s proprietary model portfolio. WISDM models use the Capital Preservation Indicator (CPI) to protect your assets during periods of extreme volatility.

Talk to your family members about estate and succession planning

If you are a small business or estate owner, the pandemic provides a good segue into family discussions around wealth, estate planning, charitable giving, long-term-health care planning, and who will succeed whom were someone to become incapacitated.

Business succession planning in a family setting is obviously complex and emotional, but your financial advisor is here to help.

It’s never too early for financial literacy

Working remotely while home-schooling your children? Consider some financial literacy topics for this week’s curriculum.  Young children should understand concepts like price, cost, and value, and on a deeper level, the differences between saving and investing money. In teaching them about concepts like income, fixed and variable expenses and prioritizing certain big-ticket items, parents can refresh their own ideas around the larger financial picture and what’s truly important.

Is your oldest home early from college this year due to the pandemic? There is no better time than now for a discussion about building credit. This time marks a good opportunity to discuss the finer points of credit management and encourage them to learn good habits. Refer them to Credit Karma to help them understand interest rates, credit limits, budgeting, and what happens when they miss a payment.

Protect yourself: personal financial cybersecurity  

Another important part of a financial assessment is the digital security of one’s assets. Under normal circumstances, cybercrime is prevalent. Now that most U.S. employees are managing their work life from home, the need to be vigilant about keeping your assets safe is critical.

The best way to protect yourself is to keep all your computing equipment up to date. Simply keeping your software, operating systems and browsers current will help you maintain your sanity (and keep you protected). Don’t use public Wi-Fi under any circumstances; especially now. Keep your antivirus software up to date, use a password manager for all of your accounts, consider setting up multi-factor authentication for those accounts, and don’t overshare on social media.

The U.S. Department of Homeland Security Cyber Infrastructure website offers guidance on the latest COVID-19 scams. Learn more here.