As a financial advisor, my mission is to help people align their values and goals with their wealth. While every advisor will tell you we prepare our client’s financial plans for times such as the one we find ourselves, I don’t think anyone would tell you they saw a global pandemic being the cause of our next financial downturn. In the midst of our current crisis a few financial principles have become as apparent as ever to me:

1) Cash is King:

The value of having a solid cash emergency fund of 3-6 months has never rung more true than right now. The effects of the Corona Virus on our economy has highlighted the necessity of having sufficient liquid cash savings. This has become imperative for those living paycheck to paycheck as well as those fortunate enough to have a high networth. The millions who were laid off and had been dependent on their job for income now tragically find themselves relying solely on their savings and government stimulus. For those whose income is dependent on their investments, a 35% downturn in the market means liquidating investments far from their highs and increasing sequence of return risk. Having a sufficient emergency fund for your specific circumstances gives you the margin to continue to have financial freedom.

2) The time to act on your investments has already past:

I’ve been asked many times in the past month what people should be doing with their investments right now. My answer is simple, what you should be doing with your investments should have been done a long time ago with your financial plan. During your financial plan, your advisor should have been discussing what your goals were, how long into the future you wanted to achieve those goals, and very importantly how much risk you were willing and able to take, amongst many other questions. Investing is a long term endeavor, If you are someone who can’t, because of circumstances or preference, stand to see a sharp drop in your net worth due to a bear market, your investments needed to be conservative enough prior to this market downturn, however unpredictable this was.

3) God is sovereign:

I don’t believe anyone on earth wanted to live through a global pandemic which shut down almost every large economy and which may take millions of lives. However, the reality that God gave his son for us at the ultimate cost to Himself means we can trust him even when it feels like the world is turned upside down.

Interested in investing with Eric? Visit https://www.schrumpw.com/contact-us/

Investment Advisor Representative of Spire Wealth Management, LLC Advisory Services offered through Spire Wealth Management, LLC, a Federally Registered Investment Advisor. Securities offered through an affiliate, Spire Securities, LLC. Member FINRA/SIPC. The content of this article is for informational purposes only and should not be considered a recommendation of any particular security, strategy or investment product or investing advice of any kind.