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How to cope with market uncertainty, job loss during coronavirus pandemic

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It's been a rough month on Wall Street.

The Dow has dropped about 10,000 points since mid-February over concerns surrounding coronavirus.

With all the market uncertainty, we reached to financial adviser Michael Mason, president of Mason and Associates in Newport News, for some advice for investors. He also shared financial strategies for people who are out of work right now.

Q: With the market dropping so much, what’s the best course of action for people who are still years away from retirement?

A: “If you’re an investor, you need to stay an investor. The market is going to go down and time is on your side. The worst thing you can do right now if you’ve ridden this down the 15 or 20 percent that it’s down, the worst thing you can do is sell. We’re even telling our clients that are ready to move money from their 401ks to our management, we need to delay that for a little while because this market is moving. Today might be a five, six percent move in the market, so we need to delay it because if that money is going to be in transit and out of the market for 7 or 8 days, you could lose 15 or 20 percent of recovery. So we need to be patient. If you’re in, stay in. And especially if you’ve got 15 or 20 years before an event, whether that event is your child’s college or maybe retirement starting, so stay in if you’re an investor.”

Q: What should people do if they’re close to retiring or have already retired?

A: “Retirement is not an event, retirement is a journey. It’s a 25 – 30 year journey. You cannot treat this like you’re going to retire tomorrow and pull all your money out, so we really need to stay invested for that journey at about a 60/40 investment base. 60 percent equities, 40 percent bonds.”

Q: How long could it take us to recover from this?

A: “Using 2008 as an example, that was about a 4 year recovery if you stayed fully invested. March of 2009 was the beginning and 2013, February, was right about when you got back to even, but if you just missed the first 9 months, if you were out all of 2009 and got in in January, that added an extra three and a half years to the recovery.”

Q: Would now be a good time to invest since the market is so low?

A: “We know you’re getting it 30 percent off. We don’t know if you hold on a little longer you’ll get it at 40 percent off, but we know right now is a 30 percent depression, so yes, but you have to invest extremely wisely. Don’t be greedy. The airlines are down 60 percent, you know they’re rallying today but they’re still down 60 percent from the high. The S and P 500 which is a blend of many companies is down 30 percent. You can bet on one or two companies with a little bit of money, but if you’re going to get back in, bet on the market, don’t bet on any one company.”

Q: What are some strategies for people who are out of work now or working with reduced hours?

A: “You’ve already paid the tax when you put your money into a Roth IRA, regardless of your age. You can get the money you put into your IRA back without tax or penalty. If you were to get into the earnings of that, well you would need to be over 59 ½. If you’re not, then you would be tax and penalized. So the Roth IRA contributions are there for you as an option. We’re talking to people about refinancing their mortgage. Just straight out refinancing just to lower their payment, but we’re also talking to folks about maybe going from a 15 year mortgage to a 30. That’ll lessen the amount that comes out each month and you can always turn it back into a 15 just by adding extra principal.”

"The people that don’t panic, they’re the ones that make the best decisions. So control the things you can control folks. You can’t control the market. You can control your exposure to people that might have coronavirus. Control the things you can. Maybe look at converting IRAs to Roth IRAs so when you get the rebound you get it on a tax- free basis. If you really need to add income, maybe stop or slow down how much you’re putting into your 401ks. At least try and get the match, but if you were maxing it out, maybe try and bring it down to the match level. Control the things you can control. We will come out of this and we’ll come out of it, my prediction, faster than people are thinking.”