Opinion: Gloom casts a shadow over the stock market. Financial experts say these are the ways you can keep investing.

In the new Netflix documentary “Get Smart With Money,” financial advisor Sheriff “Ross Mac” MacDonald tries to convince struggling NFL player, Tees Tabor, to invest in the stock market.

“The easiest way to be a gamer is to put your money into the S&P 500 SPXAnd the
Because on average it will grow at a rate of 10% each year,” he says.

The show, of course, was filmed before the recent market downturn, which has sent the S&P 500 down nearly 20% this year and the VIX Volatility Index.
increasing. as we enter Another tough week for stocksOn his Instagram channel, imrossmac, MacDonald posts signals that we may be heading into a global recession.

Meanwhile, Tabor has just been picked up by the Seattle Seahawks. So perhaps he can beat the downturn by working through it, the way most financial advisors advise clients who are concerned that markets are not bouncing back the way they did at the start of the Covid-19 pandemic.

This week, the Federal Reserve’s policy-making committee is expected to raise official interest rates by at least 75 basis points for the third consecutive meeting, the most hawkish position in more than 40 years. High rates of rooting out ingrained inflation have shocked the stock and bond markets this year. The economy shrank for two consecutive quarters.

“People have had this recovery fixed in their heads, but this time it may not be a V-shaped recovery. It may be a U-shaped instead,” says Caleb Pepperday, a certified financial planner at JFS Wealth Advisors in Pittsburgh.

But that still underscores his hope, almost certainly, that markets will eventually rise again. They always have, after all. In the past 100 years, there have been It wasn’t a period of 20 years As the US stock market did not achieve a positive return.

stomach danger

“In the short term, you have to take the risk, which is painful, but in the long term, things will return to normal,” says Roger Aliaga Diaz, global head of portfolio building at Vanguard.

For financial planner Scott Bishop of Avidian Wealth Solutions in Houston, Texas, the market pullback is a buying opportunity. His strategy with respect to clients’ funds is to keep a portion of their investment portfolios, usually around 10%, in Peaceful Treasury Bonds Spread out in two-week increments, graduate about six months to a year. As each tranche matures, he and customers decide how they feel about the market at that moment.

“I ask: Are we okay putting the money in? And if not, we’ll push it to the back of the line,” says Bishop, and reinvest it in Treasurys BX: TMUBMUSD10Y.

If there is a sudden buying opportunity, such as the S&P 500 dropping past a key support level, it may accelerate the two-week cycle and sell the next maturing T-bills early to free up cash to buy stocks.

“It’s instant liquidity, so I can post it and then email clients to update them,” he says.

Always with some cash on hand

What you do about a stock market slowdown depends largely on your time horizon for your need for money. The reservation strategy works best for those who can wait at least three to five years. This also applies to retirees who have invested a portion of their nest eggs, says Ed Slott, retirement expert and founder of IRAHelp.com.

“But you should always have some cash on hand in your IRA or other investments that can be like an emergency fund, so you can use it if you need it instead of having to dig into stocks in a falling market,” says Slott.

People over 72 who are subject to required minimum distributions from qualified retirement plans such as IRAs and 401(k)s know in advance what cash they will need for the year and should plan well in advance. The amount is based on a formula that takes into account your age and last year’s account balance, so it might feel like a bite this year, since your balance will likely be lower.

If you have an entire IRA investment, Slott suggests talking to a financial advisor to find out what items you might want to liquidate to meet the amount of RMD or living expenses you need.

If you really don’t want to cash out money from your stock holdings, you can transfer it to a taxable brokerage account in kind.

“You’d still pay tax on the amount, but then you’d have the stock in a regular account, so you never sold it,” Slott says.

The key thing to remember about the stock market slowdown, according to Slott, is: You don’t have a little to sell.

“If you sell when the stock is down 30%, you need to gain 43% to get back to where you were. If you have anything to make it 43%, that is probably outside the level of risk tolerance anyone can feel,” says Slott. Be comfortable with it.” “This, in short, is the problem of pulling back in a falling market.”

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