Every time we turn on the evening news, it seems that we hear depressing and discouraging things. But there is also plenty of good news to celebrate these days. Have you heard that we’re currently enjoying the third longest market expansion in history? In fact, if this stretch of expansion lasts another two years, it will go down in history as the longest ever!
Unemployment is also back down, to pre-2007 levels, and overall the stock market looking pretty healthy. The S&P ratio recently hit its second-highest levels since the 1940s.
With all of that good news, it would be easy to feel confident and successful. But there is a potential downside to a healthy economy, that you might not even realize until later: You might not be taking full advantage of it!
We all know that it’s a good idea to review and re-balance our portfolios regularly. But right now you have an even more compelling reason to do so. No one wants to miss a potentially lucrative opportunity, so ask yourself these questions:
How is your diversification? Risk tolerance can change when conditions are good, but don’t lose sight of your long-term goals. No matter how confident you’re feeling, diversification is still important.
How is your debt load? During times of favorable economic conditions, sometimes we become over-confident and take on too much debt. But remember that nothing lasts forever, and you don’t want to be stuck with too much debt if conditions take a turn for the worse. Plus, no one wants to retire saddled with too much debt. Right now is actually the ideal time to pay down those debts, not rack up more.
Are you prepared for a downturn? We hope that the economy will continue to grow, and that conditions remain favorable for a long time. But since nothing is guaranteed, now is a good time to prepare for every scenario. Set aside a rainy day fund so that you won’t be caught off guard in the future.
Have you met with us recently? Some people make the mistake of consulting with their financial advisors only when things have “gone bad”, and they find themselves needing help. It’s important to stay on top of your financial strategy during the good times, too. So schedule an appointment with us, and we’ll help you identify potential opportunities to take advantage of today’s favorable market conditions.
