Steps To Take In A Bear Market, A Letter To The Clients From The Desk Of Kristin Carleton

To Our Dear Clients,

At James River we have a saying that markets climb mountains, but they fall of cliffs. The COVID-19 cliff has been particularly steep cliff and the downturn has felt more like sky diving without a parachute than paragliding. It’s natural to feel nervous in circumstances we cannot control – it’s how we respond that defines our outcomes.

I could tell you all the things that advisors say at these points – stay the course, think rationally, remember your long-term goals, and look for opportunities – and all of these things are true. But many find that having something to do in a crisis helps them feel more in control (myself included). If this applies to you, try taking the below steps.

  1. Replenish or increase your cash reserves. In market downturns and prolonged recessions, cash is king. Make sure you have enough cash on hand to cover unexpected expenses or disruptions to income.
  2. Review your asset allocation. As a client of James River Wealth Advisors, you have filled out a risk tolerance questionnaire and invested appropriate to your risk tolerance. But if you are unable to sleep at night, chances are that you were invested too aggressively and will need to dial things back going forward. It’s completely normal to feel nervous and jittery when financial markets head down, but if this is going beyond jitters to feeling like it’s all-consuming, it’s time to take action. Call us and we will develop an investment plan to help reduce your risk or find a hedged option.
  3. Review your debt. Interest rates are at historic lows which makes the cost of borrowing very low. Take a look at your mortgage, credit card debt, business and consumer debt. This could be a great time to consolidate. Talk to your kids and grandchildren about their borrowing rates as well.
  4. Consider converting to a Roth IRA/401k – take advantage of lower market levels by converting your Roth IRA or 401k to a traditional IRA or 401k. This can sometimes be a complicated decision, and you will want guidance from your financial advisor, but it can pay off in the long run.
  5. Engage in tax-selling. This may be a great time to take losses on positions with large embedded gains to avoid capital gains taxes.
  6. Look for opportunities. Look to see if the market is providing opportunities to buy high quality stocks and bonds at lower prices. This could be a great time to invest new money.
  7. Stop watching the markets – now you’ve gone through the above steps, you know that you’re set-up for long-term success. Now turn off the television, disconnect from your computer, and take some deep breaths, walk around the block, read a book, or anything else that helps you relax.

And as always, call me if you need an ear to vent to or additional guidance.


Kristin Carleton

(“Any tax advice contained herein is of a general nature. Further, you should seek specific tax advice from your tax professional before pursuing any idea contemplated herein. This advice is being provided solely as an incidental service to our business as (insurance professionals, financial planner, investment advisor, securities broker)”

James River Asset Management, LLC, is a Registered Investment Adviser. Securities offered through Valmark Securities, Member FINRA and SIPC.130 Springside Drive, Suite 300 Akron, OH 44333 1-800-765-5201. James River Asset Management, LLC is a separate entity from Valmark Securities Inc. Any opinions expressed here are solely those of James River Asset Management, LLC.

The information provided has been derived from sources believed to be reliable, but is not guaranteed as to accuracy and does not purport to be a complete analysis of the material discussed nor does it constitute an offer or a solicitation of an offer to buy any securities, products or services mentioned. The examples given are hypothetical and are for illustrative purposes. Actual results may vary.


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P: (804) 323-0517

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