COVID-19 is a pandemic that has not been rivalled in modern times. The impact it has in all areas of life is tremendous, and thus, there are naturally going to be impacts to people’s investments. Although the scope is wide-ranging, it is still a good idea to consider how your investments are being impacted by the current situation.
Stocks
The stock market is already a high-risk investment avenue, and COVID’s impact has proven that there is no way to fully predict the future of these investments. In some cases, stocks will rise as a result of their positive role in COVID prevention or alleviation. In other cases, stocks will drastically fall, as some companies suffer massive hits or even go out of business. The best thing to do with your stock portfolio is look into each company’s financial health, as well as their relation to COVID. You may also choose to contact a financial advisor who can provide insight that you may not have thought about otherwise.
Retirement Accounts
Retirement accounts are a difficult subject, as there are different impacts for different accounts. Typically, individual investment accounts may see some negative effects, but this may equalize in the future as the economy recovers. If you are considering making any adjustments to these accounts, or withdrawing funds, it is wise to seek the advice of a financial advisor.
Company-funded pension plans will usually survive major economic shifts, as they are often more well funded. Government pensions are covered and will not see any changes. However, religious institutions do not have regulations regarding their pensions, so they can be completely affected with little-to-no notice.
There are other circumstances where a pension or retirement account does not fall into these categories. When in doubt, look at the regulations surrounding your account and speak with a financial professional.
Real Estate
Real estate is, unfortunately, one of the hardest hit investments at the moment. Due to fears of spreading or contracting the virus, people are often unable to visit physical properties to tour them. This can be damaging to landlords who own residential properties, as well as those who flip homes to sell. Commercial investors may have it the worst, however, as companies are going out of business, leaving their leases to dissolve with little warning. In addition, there are few if any businesses that are able to move into an office building at this point, primarily due to restrictions regarding stay at home orders.
Investments will naturally be impacted by any economic change, whether good or bad. COVID-19 has caused some major effects in both the US’s economy, as well as the global economy. Although acting hastily will not necessarily lead to a better outcome, it is smart to take stock of your investments and determine the best next steps to take with them.
Representatives do not provide tax and/or legal advice. Any discussion of taxes is for general informational purposes only, does not purport to be complete or cover every situation, and should not be construed as legal, tax or accounting advice. Clients should confer with their qualified legal, tax and accounting advisors as appropriate.
Ben Soccodato is a registered representative of and offer securities, investment advisory and financial planning services through MML Investors Services, LLC. Member SIPC. www.SIPC.org 6 Corporate Drive, Shelton, CT 06484, Tel: 203-513-6000