Prescott Specific Financial Advice for 2020
As financial advisors in Prescott, we get to see what people in our community are most concerned about when it comes to their financial security in 2020. While many of our client’s concerns are similar to those of individuals nationwide, a few things make our financial ecosystem very different from other parts of the country. This article will look at a few things that our local clients have been asking about since the Covid-19 pandemic has reshaped the stock market, retirement savings accounts, 401(k)s, and physical assets like gold and silver ownership.
The Housing Market & Home Equity
One thing that many of our financial advisor counterparts are seeing nationwide is a real concern over falling home prices and how they impact retirement savings. In Prescott and the Quad Cities, our real estate market has remained much more robust than many regions of the United States. This is apparent to anybody who has lived in the Prescott area for any length of time and includes the following:
– Prescott has a large population of retired adults, which can help minimize the local impact of increasing nationwide unemployment. Communities and regions with more young families tend to get hit the hardest by unemployment, while communities with larger populations of retirees and established workers can escape a small portion of rising unemployment numbers.
– Prescott has a very desirable population density. There is a good chance that if you see a moving truck in your neighborhood and greet your new neighbors, they are coming from a place with a much denser population than Prescott. Large population centers can be attractive because of the shopping, entertainment, and employment options, but Covid-19 has highlighted some fo the challenges of living in a densely populated area. Large cities are often the first to experience shortages in grocery stores, longer lines for Covid-19 testing, etc. As more and more news about a possible vaccine is coming out, many people in large cities fear the shortages they saw in grocery stores due to greater demand will carry through to vaccines and other medications.
– At the same time that Covid-19 was peaking, we also saw civil unrest that we have not seen in the United States for decades. The news is full of major cities in the midst of protests, riots, and other peaceful and non-peaceful demonstrations. As homebuyers have seen social unrest take over major cities at a much higher rate than smaller cities like Prescott, safety has played a significant role in people’s home-buying decisions. This trend has depleted home inventory in Prescott, which has pushed prices up while other areas have seen a sharp decline in home prices. Cities and towns like Prescott that have great shopping, restaurants, nightlife, healthcare, and education but are far removed from more turbulent population centers are becoming hot real estate markets in 2020.
Many Prescott residents have not seen their home prices take the same hit that other cities in the United States have. We are receiving calls from local investors asking where they should be putting the money that they currently have in stocks, bonds, retirement accounts, and even the equity they have in their homes. We will address that next.
Preparing Portfolios for Uncertainty
It is no secret that election years add a significant degree of uncertainty to investing. Now when you add a global pandemic, social unrest, and large stimulus packages from the federal government to an election year, you get a combination most people could have never imagined. This uncertainty has created a ton of reliable investment options for those that are paying attention to the trends. In the next portion of this article, we will help answer some questions that we have been getting more often than usual.
Should I invest in gold?
We get tons of calls from clients looking for financial advice regarding gold ownership, and for a good reason. When markets are uncertain, currencies are volatile, and nothing feels safe; gold can often feel like a safe bet. The reason that gold feels safer than other investments is simple; gold is one of the oldest known currencies on earth that is still recognized globally. National currencies rise and fall, companies expand and contract, but gold has been around for thousands of years. That being said, it is not necessarily a good time to buy. When looking at stocks, bonds, or other investments with our clients, we would rarely encourage them to buy at the top of the market. At the time of this writing, gold is at or near all-time-highs. Many proponents of having at least part of each investment portfolio contain gold as a hedge against inflation would recommend buying because they believe that gold will make a run if market uncertainty persists. While gold may make a run in the 4th quarter of 2020, it is not a given. Depending on your goals, gold may be a great addition to your portfolio in the form of ETFs. Still, a financial professional should take a look at your portfolio as a whole to help determine if gold is the right investment vehicle to help get you where you want to go.
Retirement Planning in a Recession
As financial advisors in Prescott, we are very in tune with the needs and goals of those in or near retirement. Our clients want to live out their golden years with guaranteed income that will support their lifestyles for which they have become accustomed. It is the job of a financial advisor to help safeguard investments from recessions and even depressions. When we see a rise in how many clients are looking to get into precious metals, we take a close look at the question’s intent. The question behind the question is not necessarily about precious metals, but it can be rephrased in most cases, “where is the safest place to invest in a turbulent market?” Our professional financial team at Victory Wealth Services helps clients find investment tools and strategies that will help prevent excessive losses in bear markets while positioning them for growth in bull markets.
For more information about creating a well-rounded portfolio that can help mitigate risk while positioning you for growth, please contact one of our financial professionals today.