Take a longer-term approach

MAKING A POSITIVE CHANGE: Finances Concerned by your finances? Take a longer-term approach By Colette Powers

The COVID pandemic is triggering a lot of anxiety, and for many a sense of helplessness. On top of health concerns, people and families are struggling with financial uncertainty. Many have lost their jobs, are unsure of future employment and are experiencing concerns regarding market volatility. It is not easy to feel in control, but there are some things you can do to reduce financial stress.

Keep a longer-term perspective regarding your financial plan and investments and do not let fear guide your decisions. According to Ainsley Carbone, total wealth strategist, UBS Global Wealth Management Chief Investment Office, there are some behavioral biases that investors may experience in times like these - loss aversion bias where one feels the pain of losses in their portfolio about twice as much as they do the pleasure of gains and recency bias where one tends to remember something that happened more recently than awhile back. The combined effect of the current market volatility and the recent events from COVID can create a fight or flight response causing one to feel that they need to act. Recognizing these emotions and taking a step back can help you avoid making rash decisions you otherwise might have.

Ainsley also suggests not to look at your portfolio daily because you are more likely to see a loss (losses are more common in shorter time frames) and want to react. Instead, review your plan and goals and how your portfolio’s risk/return is designed to support them. Remember, if your long-term goals have not changed most likely your plan does not need to change because if you had the right plan going into COVID its was likely built assuming extreme/ challenging situations are possible.

Update your financial plan and if you do not have a financial plan now is a great time to implement one. It is important to note that according to the UBS 2020 Own Your Worth report 49% of women globally do not engage in the most important aspects of their financial well-being – investing, insurance, retirement and long-term planning. However, many women are likely to live well into their 90’s and find themselves solely responsible for their own finances.

So, take the time to have a conversation with your partner. See where you stand financially, add up assets and liabilities, like loans, credit cards and other debts. Talk about money, what you want, your concerns, life insurance, long term care, people who matter most and discover your life’s vision. These answers are needed to create or update your plan.

Also, review the titling on your accounts and beneficiaries. Make a master list of account usernames and passwords. Share that list with a trusted advisor and make sure it is stored in a safe place. Meet with your attorney to review and update your will, power of attorney, health care proxy, and all the important documents he or she helped you create. If you do not have a will please establish one.

And if you are having financial difficulties meet with your financial advisor and/or CPA because there are some relief initiatives under the CARES Act that might be able to help you through these difficult times. COVID has presented us with so many challenges and many of us are rethinking what we want out of life. If you are questioning as well, I suggest finding time in this pause to review your and/or family’s life vision and creating the roadmap to help you achieve it. Hopefully, the process will help ease fear and uncertainty and offer some much-needed peace of mind. SWM

This article is for informational and educational purposes only and should not be relied upon as investment advice or the basis for making any investment decisions. As a firm providing wealth management services to clients, UBS Financial Services Inc. offers investment advisory services in its capacity as an SEC-registered investment adviser and brokerage services in its capacity as an SEC-registered broker-dealer. Investment advisory services and brokerage services are separate and distinct, differ in material ways and are governed by different laws and separate arrangements. It is important that clients understand the ways in which we conduct business, that they carefully read the agreements and disclosures that we provide to them about the products or services we offer. A small number of our financial advisors are not permitted to offer advisory services to you, and can only work with you directly as UBS broker-dealer representatives. Your financial advisor will let you know if this is the case and, if you desire advisory services, will be happy to refer you to another financial advisor who can help you. Our agreements and disclosures will inform you about whether we and our financial advisors are acting in our capacity as an investment adviser or broker-dealer. For more information, please review the PDF document at ubs.com/ relationshipsummary. ©UBS 2020. All rights reserved. UBS Financial Services Inc. is a subsidiary of UBS AG. Member FINRA/SIPC.