Michael Joyce recently sat down with Virginia Business to share his views on how the coronavirus pandemic affected Agili’s investment strategy, how election results affect portfolios and what to do now money-wise. Please click on the link above for his economic and investment analysis.
Early on, Diversification Mitigated Damage to Financial Portfolios
In this feature, Michael Joyce, says diversification “mitigated the damage to [client] portfolios in those [first] six weeks,” of economic shutdowns caused by the pandemic. He adds that while the firm “saw opportunities almost everywhere we looked” due to low stock prices, investors should primarily maintain a wide range of asset types.
“This is not an environment to run scared from,” Joyce adds. “I also don’t think it’s an environment in which we can just throw money at the market.”
Joyce also cautions against purely following trends that “turn around quickly” in today’s market.
Presidential Elections Have Little Impact on Financial Portfolios
Michael states that investors should not put too much stock in presidential election outcomes when managing stocks and other assets.
“Every presidential election year we get contacts that say, ‘If a Democrat wins, I want to divest everything,’ or, ‘If a Republican wins, I want to divest everything,’” Joyce says. “In almost all cases, it doesn’t make a big difference [for the markets] who gets elected.”
What Moves Should Investors Make Now?
Michael adds that there are a couple of money moves investors can make during downturns that are beneficial in the long term, such as converting a portion of an IRA into a Roth IRA — the benefit being that investors can withdraw funds tax-free during retirement because income tax is paid up front on investments. Investors would save money on Roth conversions during a down market because they would pay taxes on a smaller investment portfolio.
Michael’s concludes his comments saying, “Overall, preparing for the future by balancing aggressive asset acquisition with cautious diversification is the best way to weather a down economy.”