What to do when the market corrects: Remain patient, invest cash, harvest losses
The investment roller coaster is in motion, but hopefully it’s not making anyone nauseous or nervous. This is a natural part of the market cycle, so please remain patient, focus on your long-term goals, and stay the course with your investment allocation. This is not the time to shift investment dollars to cash.
If you happen to have excess cash on hand, however, this is a very good time to invest it. Likewise, if you happen to have investments in taxable accounts that are in the red, you should think about harvesting those losses for tax purposes. If you are harvesting losses, remember to stay invested in the market and maintain an appropriate asset allocation. Please let me know if I can be of assistance in either scenario.
Remember: Avoid the urge to shift your investment dollars to cash. People who sell out of the market at a low point will invariably re-enter the market at a much higher level. It is a losing endeavor. If this market is making you rethink your cash reserve target, your risk tolerance, or your asset allocation, please contact me so we can discuss your situation personally.