The X’s & O’s
Listen as Brent, Matthew and Josh share the nine strategies they are implementing during this recession so their clients can enjoy an ideal retirement and accomplish their goals.
Listen to the podcast episode…
Brent Pasqua, Matthew Theal and Joshua Winterswyk
Brent Pasqua: Welcome to the Retirement Plan Playbook. I’m Brent Pasqua, and I’m here with Matthew Theal and Joshua Winterswyk. Today we’re going to go over some strategies that are key to implement during some of these recession times. We’ve seen the market really just get hammered over the last couple of weeks due to the coronavirus, and we’ve seen very little relief from it. But before we start going into all of those, we are working from home. I wanted to get your guys’ thoughts. Are you guys enjoying working from home?
Matthew Theal: Yeah, Brent. I am. It’s been a nice change of pace, and I’m working from my kitchen table in a one bedroom apartment, and then across the way is my wife, Hailey, who’s working from our desk. So we’re kind of splitting offices right now. The nice part is being able to go for walks and obviously not having to commute to work, but I do miss being in the office with you guys. So that’s a little disappointing.
Brent Pasqua: Are you enjoying it, Josh?
Joshua Winterswyk: It’s different. It took me a little while to get used to it, but it’s nice to be able to just kind of dial in and focus. And again, I’m in a small space like Matt, so we have that same challenge. But my dogs love it. I have two dogs, Memphis and Mila, and they love me being home. Sometimes they bother me a little bit too much and are distracting, so I got to take them for walks, but at least I have some walking buddies. They replaced you guys as my walking buddies for the short time. So it’s been so far so good.
Brent Pasqua: Yeah, I’m enjoying it also. I think some of my favorite things are being able to take lunch and have lunch with my kids. Obviously, I normally don’t get to do that. And then when they’re sort of getting home schooled obviously right now because schools are out, so I try to take as many recesses on their schedule that I can, so that I can go out there and play with them for 15 minutes and then come back in. But there’s obviously some less distractions being at home, which is good. You can really get a lot of work done with some less distractions. But then there’s also some of those home distractions also. I think it’s wonderful, I have no problem with it. We’re getting as much work done now as we do in the office, if not more. So I think it’s great and it cuts off that drive time.
Matthew Theal: Pretty scary time for landlords, right? I mean, all of these businesses running efficiently without offices. I wouldn’t want to be holding a big portfolio of commercial real estate right now.
Brent Pasqua: Yeah, or residential.
Matthew Theal: Yeah.
Brent Pasqua: I mean, there’s going to be a lot of people that can’t pay their rent right now.
Matthew Theal: Yeah, scary times.
Brent Pasqua: So let’s get an update on everything that’s happened in the last two weeks. As of right now, obviously the coronavirus has pretty much shut down about a third of the world. California and New York are pretty much all on lockdown. There’s multiple states that are following suit with them. I’ve kind of seen that progression of other states becoming more strict on what they’re shutting down. Obviously big cities are at big risk of the spread, also just based on transportation in those cities, they’re at risk. There are more stricter guidelines at the CDC, and the government’s coming out with at the state and local levels to control this thing. We’ve seen that really progress over the last several days.
Brent Pasqua: Right now, many people are just under quarantine. Everyone’s working from home. Everyone’s trying to minimize as much contact that they have personally, one on one, with people in person. The number of the COVID-19 cases in the US are increasing at a more rapid rate. As Dr. Fauci has said, we’re trying to flatten that curve, but it seems like right now we’re just making that progression up the curve right now. It feels like that storm was coming in. The storm is hitting now, and we don’t really see the end of the storm yet, but hopefully here in the next several weeks we can hit that curve peak that we’re going to get to, and hopefully it’s flat, and then move forward. For some updates on the market, Matt, what’s happening right now in the stock market?
Matthew Theal: Yeah, so we’ve witnessed in the last month the fastest decline in the stock market ever. At the low, we were down more than 30%, 30, 34%. It has recovered in the last few days. For those listening, we are recording this on Wednesday, the 25th. That’s nice to see. A couple up days in a row. We’ve seen some great response by the federal reserve. They’ve stepped in and really tried to soften the damage. Essentially, they’re purchasing an unlimited amount of financial assets to help out with market liquidity. One thing that’s really interesting for people to grasp is right now, New York City’s shut down. Right, Brent, you mentioned that at the start of the show. Do you think trading floors are open at major financial institutions?
Brent Pasqua: Can they do it remotely?
Matthew Theal: Yeah, so they’re all trading remotely right now. The stock guys, the fixed income guys, the credit derivatives guys. They’re trading from their kitchen table.
Brent Pasqua: Yeah, that’s pretty amazing to think about the technology that has to get transferred over to at home and to be able to operate on those levels.
Matthew Theal: Right. That’s probably one of the reasons why we’ve seen all global financial assets drop so fast. Is there’s just no liquidity, there’s no trading desk actually together. And so for people at home who are scared and scared of the market, just realize this is unprecedented. Never happened before. Everyone was working together, we probably wouldn’t see this fast of a decline.
Brent Pasqua: Because in 9/11, didn’t they… It just shut for a couple days, and then it just fired right back up, right?
Matthew Theal: Yeah, the market was closed for, I believe, it was either three or five days. I was still in high school in 9/11 so I wasn’t trading yet. But yeah, they reopened everything pretty fast, and I know there was a big… I wouldn’t call it celebration, but a lot of people came together and got the exchanges back up and running pretty fast.
Brent Pasqua: These are tremendous.
Joshua Winterswyk: The news has been on top of that headline of what the trading floor was going to do, interviewing representatives from the New York Stock Exchange, and their stance has been strong from the beginning of, we’re just going to work remotely if we have to. And we’ve seen that come true.
Matthew Theal: Yeah, absolutely.
Brent Pasqua: So Joshua, what is actually the status right now of the economy?
Joshua Winterswyk: Well just first, economist … Gross Domestic Product, we’ll talk about that, and that is just a snapshot of the economy, and right now economists expect a drop anywhere from 15% to 20%. So we’re seeing a contraction of the economy already in just a short amount of time, so as eye opening as the stock market drop is, those expected GDP numbers are also eye-opening. They also expect unemployment to be at least 10%. So what an increase of at least 7% just in a few weeks of the unemployment rate. I saw a good article this morning, that one of the fed presidents said it could be as high as 30%. That number, when that comes out, is going to obviously just be really, really extreme and quick and something we’ve never seen before.
Joshua Winterswyk: Then also, with the GDP contraction, we’re now guaranteed a recession, and I would even argue that you could call it a recession now without even seeing the data. I mean, just as far as the research out there just of what’s already happened, we know how many businesses have shut down. Certain sectors are completely not working. So spending, unemployment. I don’t think we need to wait too long to actually call this a recession. So just again, very crazy how this happened so fast.
Matthew Theal: I know two people who got laid off last week. I don’t know about you guys. And this isn’t a tight circle of people. It’s family members. So I don’t know about you guys.
Joshua Winterswyk: I haven’t had anyone directly, but I have a couple family members also who just run small business. And work, I mean everything stalled. They can’t be around other people, and other people don’t want the jobs to be done, so there’s just, again, a complete shut down of their revenue, their business. Scary time.
Brent Pasqua: And it has to be so hard for people who are hourly and obviously they’re sitting at home right now and they can’t work. They want to work. Businesses want them working, but everyone’s just having to sit back and ride this thing out. And for the greater good of humanity and the health of everybody, we just got to ride this thing out, get it over with as quickly as possible and as efficiently as possible, so we don’t just spike that curve right back up again.
Brent Pasqua: One of the things that I think is so interesting right now as we get into this topic is that most people are so worried about their portfolio, what their portfolio is doing, what the value of their portfolio currently is, how much it’s going up and down every day, what the stock market is doing. But I think that the focus really should be on other things. You can only control so much of your portfolio. At the end of the day, you need to control the things that you can control. Today I think what’s important is let’s talk about ways that we can actually improve our financial situation long-term, and things we can do right now that could put us in a better position long-term, and put us in a better position today. And so let’s talk about what some of those strategies are. Matt and Josh, we created a big list of strategies of things that people can implement. What’s the first strategy, Matthew, that we came up with?
Matthew Theal: The first strategy is to postpone those big expenses. This is something that really hurts a lot of people in a recession. Because you actually, believe it or not, probably had the most money of your life in February. And I know quite a few people who were planning a big expense this year, whether a car, a new house, or a vacation. Now that we are in a recession, the amount of money you have if you’ve invested in global financial markets has dropped probably by somewhere between 10% to 20%. Hold off. Car dealers are going to be ready to haggle. That home you see on the market, it’s not going anywhere. Banks probably aren’t going to be lending as aggressively. And that vacation, if you cancel it now, you’ll probably get it a lot cheaper in four months.
Joshua Winterswyk: Yeah, that’s a really good point. There’s just so much uncertainty right now. Those big expenses are going to just be hard to be planned for in the short term. So just really delaying them. It can be kind of enticing. There’s cheap bites right now, there’s discounts. Nike, we talked about, has a 25% discount I think, they just ended tomorrow. So it’s enticing to go out and spend, but now’s a good time also, Matt I agree, to postpone any expenses and be aware of your personal finances.
Brent Pasqua: Given that we’re sort of in this different situation right now with the way that this virus has affected the economy and the market, how do we know that in six months or five months from now, once this settles, that prices of everything just go right back to where they were and they’re not going to stay down? Why should we delay doing some of those big expenses? Do we think this could last longer than that, and these things are going to get cheaper?
Matthew Theal: It’s going to last much longer than everybody expects. Are you really going to want to go outside after this? They say in Italy it transitioned from a few weeks into the coronavirus case, everyone knew someone who got laid off. Which is, that’s where we are right now. To now, every Italian knows someone who’s died from coronavirus. Are you really going to want to go out and spend money? Are you going to want to go be in social settings and be near people who could still have the virus or had the virus when one of your family members passed away?
Brent Pasqua: I think there’s an instability that companies are still going to have because their revenue’s not going to look the same. And people are going to be more hesitant to do a lot of things. So yeah, I guess the ripple effect could really last some time.
Joshua Winterswyk: Yeah, and through this period, how they’re affected, even if this short term, you’re going to see how prepared they were going into this. Because coming out of it, if it does take a year, three years of recovery, they’re not going to be able to spend money. They’re not going to be able to have that projected growth that they did before this happened. It’s going to take some time to recover if they weren’t prepared for this type of downturn before it happened.
Brent Pasqua: Absolutely, so the first strategy is postpone those big expenses. Hold off on big ticket items. Wait a little bit until after this passes. You’re probably going to get those for a lot cheaper in the future, so I think that’s a great strategy to consider. What’s strategy number two, Joshua?
Joshua Winterswyk: Strategy number two is to take less money from your portfolio. Now is just a great time to reassess your withdrawal rate from your investment portfolio. That pot of money has declined, whether if it’s been a little or a lot. And so taking the same amount of money out of your investment portfolio with the value decreasing is going to create a higher withdrawal rate, which could really damage your retirement plan. So now is just a great time to reassess that withdrawal rate, adjust it, and take less money out. There’s less in the pot, we need to take less from the portfolio through these times and making sure that that pot of money doesn’t run out.
Matthew Theal: Yeah. Well said. This is the time where you want to actually stop using your portfolio for withdrawals. It’s down. If you don’t need the money, don’t take it. Or skimp a little bit. It goes back to the expenses. I’m sure there’s a few things you could cut in your budget so you don’t have to rely on your portfolio for income in times like this.
Brent Pasqua: Yeah, I think people are spending less money being at home right now. It’s probably, we’re going to be in this for several months. This is going to have a ripple effect. Again, I think if we reduce our portfolio withdrawals, minimize them, like you guys said. If you don’t actually need that money, you can reduce it down. Maybe invest some of that cash that’s in the portfolio. You don’t need as much in cash because you’re not taking withdrawals. Great time to buy some positions at a lower price. It creates longevity in your portfolio like Josh said, where you’re not having to take money out where your portfolio is low and taking at a higher withdrawal rate. I think that’s an excellent strategy.
Brent Pasqua: Let’s go on to the next strategy. Matthew, what’s the third strategy on our list?
Matthew Theal: This one’s a little bit harder to do right now, but there are quite a few corporations that have announced they are hiring. But if you do get laid off from your job, there’s plenty of part-time jobs that are available. I know Amazon, CVS, Walmart. They’re all hiring right now to meet the massive demand they’re seeing. Go get a part time job. Supplement your income that way. Go to work, work for a few hours a day instead of taking that money from the portfolio.
Joshua Winterswyk: I think that there’s just opportunities too, right? It’s a time and that strategy of what I hear is there’s part time work out there. There’s opportunities to not only help, if you want to help your community, but ways to make money. I think it is a good strategy to look into because there’s still work that needs to be done. Like you said, all of the companies you listed, even the Dominoes and Papa John’s came out and said they’re hiring tons of delivery drivers. So just a good strategy to look into at this time.
Brent Pasqua: There’s ways for people to work right now with minimal contact with people to still be sort of quarantined or social distance, and not put themself at risk but still work some of these jobs. There’s a lot of people hiring, so not everybody has to just sit at home and not be able to work. There are options out there.
Brent Pasqua: So next on the list, Josh, what do we have for us for number four strategy to implement?
Joshua Winterswyk: Your fourth strategy to implement is considering contributing into retirement accounts. Now is just a great time if you are, let’s say, doing your taxes and you’re considering contributing to your IRA. Now’s a great time to fund that IRA for last year, and maybe even potentially this year’s. It’s also just a good time, if you haven’t had a 401(k) set up before, to contribute to your 401(k). Making sure you’re getting those matching dollars. Even if you do have a 401(k) set up, it’s also a good time to increase those contributions because the stocks are discounted. We’re lower than we were in January, so increasing those 401(k) contributions is going to buy you shares at a better price. So just a really good time to seek those opportunities, and then those contributions also have a tax benefit. Just a really good time to reassess those contributions to retirement accounts.
Matthew Theal: Well said, Joshua. If you’re eligible for a 401(k), IRA, Roth IRA, whatever it is, max fund it all right now. Every spare dollar you have, put it into retirement savings. It’s going to help you on the tax side, and your money’s going to grow at a substantial rate because stocks have fallen, so that means we have more upside.
Brent Pasqua: Matt, is there a strategy that you would implement or recommend to clients who are contributing into a 401(k) plan? Should they be putting these new dollars into all their stock portion? Should they use target date funds? Is there a strategy, given the circumstance we’re in, that they can use with this new contribution?
Matthew Theal: That’s a great question, Brent. It’d be on an individual basis. We’d have to look at the 401(k) to see what funds are available. I know that I’ve had a few conversations with my old clients who have been set up a little bit more conservative, so they haven’t seen this big of a downward move in their portfolios, and we’re actually talking about going more aggressive now so they could capture some of those big returns that we’re predicting are going to happen in the next five to 10 years because of the sell-off.
Brent Pasqua: Josh, why is there such a big advantage if people have money sitting in savings account, checking account right now? They have an emergency fund. To take that money from cash that hasn’t been at risk during this recession or this coronavirus outbreak, and putting that as a contribution to an IRA, Roth IRA, and so forth?
Joshua Winterswyk: Well, you’re really taking it from an asset that, at this time, isn’t losing. Your cash hasn’t dropped. It has no capital depreciation. You’re taking that and investing it into an asset that is low. It’s that strategy of we want to buy low, and you’re buying low if you’re taking your asset that is, again, hasn’t had a loss, and now reinvesting that into an asset that is lower in price than it was.
Joshua Winterswyk: So that’s one really good advantage, and the other one is if it’s cash and you’re putting it into those retirement accounts, that tax savings. We don’t know how this year’s going to end up, so saving even more money, which is helping with that overall financial picture, that’s going to help you save money. You’re paying less in taxes when 2020 comes to an end, so it’s just benefiting you on both sides. You’re buying an asset that has depreciated, and you’re also saving money on taxes. That sounds like a pretty good deal to me.
Brent Pasqua: Sounds outstanding, especially given the circumstance, you can really get things at a lower price. The next strategy that we created is a high level strategy. It’s one that could be implemented yourself or with your advisor. Matt, what’s the next strategy?
Matthew Theal: This is a Roth conversion. Most people probably have an IRA or a 401(k). I’m going to assume those have dropped in value. If they have dropped in value, now is a great time to consider converting that to a Roth IRA because you will pay less taxes, and then you could still invest in equities or stocks like we’re saying and capture that high upside now on the Roth, and you get to bypass the R&D, plus you get the tax deferral of Roth.
Joshua Winterswyk: And while tax rates are lower. We can’t forget that the tax rates are lower, so it’s just another reason why that this strategy is attractive. Like I said before, it’s another good deal that’s out there right now.
Brent Pasqua: Great point. Is there a strategy with doing the Roth conversion where you’d say, well we’re going to sell more stock positions in the IRA, possibly, and then convert them over to the traditional IRA, buy those similar stock positions in the Roth IRA so that the Roth IRA’s going to grow potentially at a higher exponential rate and build up over time versus the traditional IRA because of the tax advantage?
Matthew Theal: Well here’s a great thing you could actually do, Brent, that most people don’t know they can do, is you could convert individual funds or stocks that are inside of IRA to a Roth IRA. So you don’t actually have to sell.
Brent Pasqua: So people could transfer those directly over, convert them over, and then as that starts picking up, you Roth can start growing, and you can have tax-free money in the future.
Matthew Theal: Exactly. But you do have to come up with money to pay the taxes. You might have to sell some shares to pay the taxes, or you’ll have to take the money out of your savings to pay the taxes.
Brent Pasqua: Let’s provide a little bit of clarity on that situation. So a traditional IRA, you put in with pre-tax dollars, and when you take it out, it’s taxable. Roth IRA is after tax dollars, and when you take it out, it’s tax free. So what you’re saying is taking it over from the traditional IRA, moving it over to the Roth, paying some taxes as you transfer it over, and then when you go to take that money out of the Roth in the future when it’s a much bigger value, that’s coming out tax free.
Matthew Theal: Exactly. Exactly.
Brent Pasqua: Seems like an excellent strategy. It’s one that should be consulted with an advisor. It is conversations we are having with a lot of our clients. It is a great time for it, so this is a great strategy option for consideration. Joshua, what’s the next strategy we have on the list?
Joshua Winterswyk: The next strategy, Brent, is to consider tax loss harvesting. So if you have an after tax account, or we call it a brokerage account or a non-qualified account, those positions that you hold in there are taxable every year. The dividends and interest, and the you have what’s called capital gains, so as those securities appreciate or depreciate and you buy and sell them, they have a tax consequence. But right now, since the actual market is down, you might have some positions or securities that are at a loss. And so tax loss harvesting would mean we’d sell those positions to realize that loss.
Joshua Winterswyk: What that benefit is, is you get to actually report that loss on your tax return, and so it’s an actual tax benefit at that time. If you are using, to give an example, an index strategy, just because you sold that security doesn’t mean you can’t buy another security with those proceeds. So if you’re indexing, you could just swap out one index fund for another and keep the money invested, but you’re realizing that loss as a tax advantage through this period. Just another strategy to find some value in the time that we’re in.
Matthew Theal: Well said. This is something I’m doing with the majority of my clients right now. I’ve even done it in my own portfolio. I’m doing it with my parents’ portfolio. This is a great time to use that strategy. Get the tax benefit, and then invest in something else.
Brent Pasqua: So when you say security, what do you mean by security?
Joshua Winterswyk: Whatever investment you’re in. It could be a mutual fund, an exchange traded fund or ETF, your stock positions, bonds positions. You can use those securities or any of the securities within your account to tax loss harvest. One other point that I wanted to make too is that you’re limited to how much loss you can use in one year, but it does carry over. It could potentially offset gains in the future, so when the market does recover and you have capital gains inside of your account, then eventually you could offset some of those gains with the losses that you have today or at this time. Just another advantage of looking at a tax loss harvesting strategy right now.
Matthew Theal: One strategy that I think is important that goes along with this is if a client, and I’ve had this conversation with clients, if a client is holding a position right now, let’s say an individual stock, that is at a loss that they really don’t want to hold long-term, but they’ve only been holding it because maybe before the drop they had a gain in it and they didn’t want to pay the taxes on it, right now if you’re not wanting to hold certain positions, certain stocks or ETFS or mutual funds for a long period of time and you can sell those right now and get out of them with a minimal gain or a loss, right now is as good as any to get out. Is that correct?
Joshua Winterswyk: Yeah, if that’s your reasoning. Mm-hmm (affirmative).
Matthew Theal: And then think of it this way, it’s the opportunity cost, right? You could sell security A or stock A that you don’t really like that much, and then you could go buy with the money stock B, C, D that you like a lot better that’s more attractive now because that stock has fallen a lot in price as well.
Joshua Winterswyk: And get the tax benefit.
Matthew Theal: Exactly.
Brent Pasqua: I love this strategy. I think it’s a great one on the list. What’s the next strategy, Matthew?
Matthew Theal: We already kind of touched on this, but take a look at your savings account. Take your expenses, multiply it by six. Let’s say that you have $5,000 expenses, multiple that by six. We are looking at $30,000. You should have that in your emergency fund. Take the excess you have in your savings account. Say it’s maybe you have 50 grand, so it’s a 20 grand difference, and invest that $20,000. Now’s a great time to invest cash that’s on the sidelines. Prices are low in the market. You could build a conservative portfolio, you could build an aggressive portfolio, but just get that money out of the bank. The interest rates they’re paying you are nothing, and you have positive expected returns right now in stocks for the first time in probably five years.
Joshua Winterswyk: I like that strategy. I know we had already kind of touched on it. I think it’s just important to add that make sure you’re planning out the next few months. Make sure you have enough in that emergency savings before you go forward with that strategy. But again, now’s a great time to get that excess cash invested.
Brent Pasqua: And this strategy’s great for anybody. If you’re younger or you’re retired, you’re planning on retirement. You have excess cash right now, there’s no reason to probably not start to get it invested in some capacity. It doesn’t have to be aggressive. It could be super conservative, but right now everything’s on sale. It’s a good time to really get that excess money going and let it start earning some higher interest rates. Joshua, what’s the next strategy on the list?
Joshua Winterswyk: The next strategy on the list is rebalancing your investment portfolio. What this means is when you have an investment portfolio that’s allocated, let’s say, between stocks and bonds. As there’s fluctuations in the market, your allocation might get thrown off. Let’s just use an example of a 60% stock, 40% bond portfolio. As it’s invested, and especially through this period, since the stocks have declined in value since you originally constructed the portfolio, that percentage might get thrown off. You might now only have 55% stock. You’re off your target allocation.
Joshua Winterswyk: So through these times, when we get dripped away from our target allocation too far, we like to do this strategy called a rebalance. Which we’d sell whatever position is over allocated to buy the position that is under allocated. So if the bonds are, again, now 45 instead of 40, we’d sell 5% of those bonds and then buy 5% of those stocks. What we’d be doing is practicing really what good strategy is, is we’d be selling high and buying low, and we’d be selling the bonds at a relatively higher price and purchasing the bonds at a low. This can really improve your portfolio long-term by utilizing this strategy of rebalancing.
Matthew Theal: Love this strategy, and like I said previously, I also love going more aggressive now. If you had been set up conservative because maybe you were afraid that the market was going to crash, guess what, the market just crashed. Go more aggressive. This is what you said you were waiting for. There’s no reason not too.
Brent Pasqua: Yeah, this is a strategy that I think is one of the top reasons why people need to have an advisor, and that’s because we take the emotion out of it. We don’t look at just the dollar figure. When somebody’s looking at their account, they’re seeing how much they’ve had, how much they lost or how much they’ve gained over time, and how much they gave that back. We’re not looking at it in that perspective. We’re looking at it as a construction of a portfolio, allocations of percentage, and we’re looking at academic research, and we’re able to actually take a step back and not have that emotional connection. Doing a rebalance in a portfolio does take a little bit of an uncomfortable-less to do it because you’re pushing your risk back up, but academic research is clear. Rebalance your portfolio when they hit these marks, take the emotion out of it. Good advisors will help you do that, I think that’s a critical strategy and one that’s very, very hard to do right now, but long-term it’s a great move.
Matthew Theal: I agree.
Brent Pasqua: And what’s the next and last strategy that we have on the list?
Matthew Theal: The final strategy, I don’t really know if this is a strategy as much as it’s a, here’s a hot tip, but don’t do anything that’s going to impact your retirement negatively. We know it’s scary. We talk to our clients, we’ve been talking to prospective clients. Everybody’s portfolios dropped in value since February. We know you’re scared, but you’re an individual person. Most likely, your account is for retirement. Don’t do something that you’re going to end up regretting and that could impact your ability to retire. Essentially what that means is don’t panic out of the stock market and sell your mutual funds, your ETFs, your individual stock positions. Keep them. The market will go back higher. This is a temporary blip. We’ll take it a month, a year, two years, five years. Nobody knows, but if you get out of the market, you’re essentially saying, I don’t have a plan.
Joshua Winterswyk: That’s a good point.
Brent Pasqua: Yeah, I think these strategies again, I think they’re great strategies to implement. They’re things that are actionable that you could be doing now. Some of them need calculation, but there’s great things that you can do on this list that could put yourself in so much a better position long-term and not be doing things that are going to harm you like jumping out of the market. These will put you in a great position. Lowering your expenses, and doing some of this conversion. Making contributions. These things are great long-term. I’d suggest revisiting the list, going to the show notes, looking at the list, and seeing which ones, if not all of them, you can implement because there are some very, very good strategies that will be helpful long-term.
Brent Pasqua: Last question I have for both of you is since you guys have been at home, is there one thing that you’ve either purchased or been using at home more that you’re really enjoying since we’re spending more time that we probably have in our entire life?
Matthew Theal: No, I haven’t purchased anything. We’re going into a recession… The only thing I’ve been purchasing, Brent, I’ll take that back, have been bought in stock. Obviously, hopefully most listeners have grasped this. I’m coming off on this podcast as really liking stocks here and being overly bullish. I think there’s a chance that they could fall a little further, sure. Maybe. But I have slowly been purchasing stock to set myself up better for the long-term, and a note to all of you people, your baby boomers, the last of the baby boomers too haven’t yet retired, who are in your 60s, this is most likely your last great buying opportunity in the stock market, so take advantage of it.
Brent Pasqua: So you’re not playing games at home, you’re not hanging out. You’re buying stock all day.
Matthew Theal: I’ve been researching the stock market the most I ever have in probably a 15 year time period looking for good companies to buy.
Brent Pasqua: Josh, what’s some things that you’re doing at home?
Joshua Winterswyk: The only things that I’ve been buying are things that are going to help my home work setup or my home life. So just extension cords and extension wires that are just going to make it just a little bit better to look at here for my setup. Other than that, I haven’t really been buying much, and plan to buy stock positions like Matt said through this period. I think it’s really important. One thing I’d kind of just like to add is planning for your personal finances is just as important, or I’d say even more important, than the portfolio fluctuations right now.
Joshua Winterswyk: Utilizing some of these strategies that are more planning focused are really what’s going to set your plan apart when you’re going forward. Now’s a good time if were holding off on setting up a plan or even just a Mint account like we’ve talked about in our previous podcast episodes, with this extra time at home, let’s do that. Let’s put ourselves in better positions for this recovery, and I’m just thinking that it’s really, really important for people to pay attention to their personal finances at this time along with their portfolio. It’s not just about those investment right now.
Brent Pasqua: Give some people some ideas of things to do while you’re sitting and quarantined at home. We did send, until Amazon ran out, some clients puzzles. I’ve seen multiple pictures of people that are doing puzzles right now. It’s kind of helping them pass the time, stay off the TV. Other things like card games, been playing a lot of Uno with my kids. It seems to be kind of an every night thing that they’ve enjoyed doing. I think there’s obviously ways to be creative with our time at home right now and have fun with it, and just try and stay off the media because it’s always so much worse on TV, and it creates anxiety and stress. It’s not worth watching. Spend more time with your family. Enjoy the time together. Let’s enjoy this, and soon enough, this is all going to be over and we’re going to be right back at work.
Brent Pasqua: Thank you for listening to the Retirement Plan Playbook. I’m Brent Pasqua, I was here with Joshua Winterswyk and Matthew Theal. For the show notes, you can go to retirementplanplaybook.com or visit our website at rpawealth.com. If you do have any questions, feel free to reach out to us, and we look forward to obviously being on another podcast and giving you more updates very soon. Thank you.