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JULY 2022: 4 Shrewd Maneuvers in a Down Market

July 08, 2022
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It’s natural to think “defense” during a bearish market season. But why not mix in some “offense” with your defense? Here are four moves we can discuss together that may be helpful during the current market downturn.

  1. Invest Your Excess Cash: If you have excess cash earmarked for a long-term goal (retirement or college, for example), a downturn may present an opportunity. Over the last three years, the Standard & Poor’s 500 compounded annual growth rate was 9%. Even with all the pandemic-related volatility, that’s still shy of its historical average.1

  2. Consider Series I Savings Bonds: With inflation at 40-year highs, you might consider some fresh ideas for investing.
    I-Bonds are backed by the U.S. government and pay a rate of return plus inflation protection. The government sells these bonds directly to consumers in increments of $10,000 per person per year (financial advisors are not permitted to offer these products). To purchased these bonds, you can visit TreasuryDirect.gov to open a free account. As always, please reach out to us should you have any questions.

  3. Take a Look at Taxes: Each year, taxpayers can deduct up to $3,000 in realized losses. If your losses exceed $3,000, you may be able to carry them forward into future years. Make sure to speak with your tax professional before making any decisions.

  4. Review Monthly Withdrawals: If you are regularly withdrawing from your investment account(s) to support your monthly expense budget, but you don't necessarily need some or all of what you are withdrawing, it helps if you can scale back your distributions during market weakness. The rationale for this suggestion is because it takes the sale of more shares at lower prices to equal the same value as when the market was at higher levels. When the market later experiences a rebound, your portfolio would be participating in that strength with fewer shares than it otherwise would have. 

Strong and weak economic cycles are both natural and normal. But if you are able to implement a few small steps during the weak cycles, the probabilities are that you will be in a better position when the next strong cycle occurs.

Regardless of the economic cycle we might be experiencing, please know that we are always available to provide you with some helpful tips, assist with keeping your investment plan in focus regardless of the market's volatility, and to analyze your financial situation in its entirety -- all with the objective of helping you reach your near and-long-term objectives.  

1. Yahoo Finance showed the S&P 500 at 3020.97 on June 24, 2019, and 3,911.74 on June 24, 2022. Past performance does not guarantee future results, individuals can’t invest directly in an index, and the return and principal value of stock prices will fluctuate.

  • The transition from Waddell & Reed's WealthLink (eMoney) to LPL's Wealthvision will take place over the weekend of July 9th, 2022. Beginning Monday, July 11th, access will be through a new webpage: https://wealth.emaplan.com/lpl/SignIn?lpl, but your username and password will remain the same.

  • LPL is in the process of transitioning eSignature vendors from DocuSign to Adobe Sign, so as a result an email with documents for eSignature will be received from either DocuSign or Adobe Sign. After opening this email, you will be prompted to verify your identity using either the last 4 digits of your SSN or a quick and easy phone authentication, and then will be prompted through the signing process. Further detailed instructions can be found in the DocuSign Client Experience Guide and Adobe Sign Client Experience Guide.

  • Our Client FAQ page has been updated with comprehensive Account Access, Account Deposit/Withdrawal, and Account Maintenance information. Please bookmark this page for future reference, as we will be updating this page with relevant information on a regular basis.

Things You Can Do on the IRS Website

While the IRS website might not be in your top bookmarks, the website is helpful for a lot of things regarding taxes. Here are just a few things you can do on the site:

  • Use Free File, where you can access brand-name tax software and online fillable forms.
  • Use the IRS e-file system: a safe, easy, and common way to file your tax return.
  • Check the status of your tax refund.
  • Find out how to make payments electronically to pay your federal taxes. You can use a credit or debit card or enroll in the US Treasury’s Electronic Federal Tax Payment System to pay your taxes.
  • Get tax forms and publications, including helpful tips for frequently asked questions.

* This information is not intended to be a substitute for specific, individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax professional.

Tip adapted from IRS.gov

What surrounds everyone and is the end of time and space?


Last month's riddle: There are 2 nouns in the English language that become men’s names when you capitalize them – and when you capitalize them, you alter their pronunciation. Name either or both of these 2 nouns, both of which end in ‘b’.  Answer: Herb and Job (herb and job)