Regardless of whether coronavirus has caused residents financial strain, AJ Davis, a financial advisor for Edward Jones in Frisco, said there are steps they can take to invest in their future and find financial relief during the pandemic.
Edward Jones has 23 advisors in Frisco available to provide financial assistance, Davis said. While offices are closed, potential clients can set up appointments with advisors over the phone or online.
Taking advantage of the CARES Act
Creating a budget and sticking to it is one of the first steps Frisco families should take, Davis said, especially they are experiencing financial hardship due to the virus.
The 16-year financial advisor said residents should then see how they can benefit from the recently passed Coronavirus Aid, Relief and Economic Security Act, or CARES Act.
“It contains a number of provisions that provide meaningful relief to many individuals and their families,” he said.
Davis said some of the most important provisions of the CARES Act include:
- Elimination of the early withdrawal period in retirement plans;
- Increases in the retirement plan loan amount for 2020;
- The waiving of required minimum distributions for retirement accounts in 2020;
- Mortgage relief for homeowners;
- Eviction relief for renters; and
- Student loan payment suspension.
“That gives a lot of relief for individuals that may be struggling financially,” Davis said.
The recovery payment, commonly known as a stimulus check, is another avenue eligible residents can find financial relief, Davis said.
“If they’re in a position to be financially set, they could use it to put towards their financial future,” Davis said.
While the market is going to experience an increased amount of volatility in the near term, Davis said continuing to invest is important for achieving financial goals.
“These market corrections always feel unsettling,” he said. “But it’s important to recognize that they are actually a normal part of the long-term investing process.”
The U.S. recently finished its second-longest bull market, which is when share prices rise and encourage buying, Davis said. But prices are now starting to decline and encourage selling, which is also known as a bear market, he said.
“We’ve entered bear market territory from an extremely high point,” Davis said. “Bear markets typically don’t last nearly as long as bull markets.”
Since the market is unpredictable, Davis said it is important for residents to be patient, disciplined and focused on their long-term goals.
“We can’t control the markets, but we can control our reaction to it,” he said.
Those with more diversified portfolios will likely see less of a decline as compared to those with holdings almost entirely in stocks, Davis said.
“While diversification can’t guarantee profit to protect against all losses, it can help reduce the impact of volatility,” he said.