Times like these remind us of how fragile the global financial system can be, and how quickly general sentiment can switch from risk on to risk-off. If you find yourself asking, “What should I do with my 401(k)?” you are not alone, this is one of the more common questions we have been receiving lately, and we try to remind our clients that the markets will always be cycling. A 401(k) is a long-term plan that shouldn’t be abandoned entirely through the lows of every cycle. But these pullbacks should be seen as an opportunity to review the portfolio and assess your assets.
At Fogel Capital, our review process begins by taking a step back and looking at the portfolio in broad terms. We look to see if the portfolio is balanced correctly and whether it was set up properly from the beginning to achieve the goals of your investment strategy.
We then dive deeper into our proper review process of each investment. This review includes evaluating the weighting of each asset, analyzing the fee structure associated with any holdings, verifying that the security suits your timeline to retirement, and confirming that the risk profile of the investment matches the risk profile of the investor.
Looking back now to the Dow Jones over the last 50 years, every low created an incredible opportunity to build out an investor’s portfolio, and we see this COVID induced pullback to be no different. Of course, timing the market is tough and challenging, especially during the volatility of this magnitude, but slowly and carefully building a position over some time is something that savvy investors do when these conditions present themselves.
The follow-up to the question “What should I do with my 401(k)?” is usually “What stocks should I buy now.” The answer is highly dependent on the individual investment strategy of the client in question. We take into consideration the difference between using market downturns to buy growth or value. In the current environment, this strategy highlights the difference between purchase technology, communications, and online services, which continue to perform well versus opportunistically investing in sectors such as hotels, airlines, cruise lines, and oil, which have been hit the hardest from the pandemic.
We understand that times of volatility brings tremendous uncertainty, and we are here to help you navigate the situation. If you are interested in reviewing your current retirement portfolio or looking to taking advantage of the opportunities in this market, we will analyze your portfolio and design an investment strategy to achieve financial success. Call Fogel Capital today at (772) 223-9686 for a free portfolio consultation.