It's too early to make any big speculations about what the financial landscape is going to look like in the months to come. The one consistent piece of advice is to keep an eye on the long haul when making stock market investments. Yes, many stocks are diving at the moment. However, time and history tell us that companies and industries can come back with a thunderclap once the smoke of a recession or worldwide setback clears. Let's discuss some general tips regarding financial opportunities for investments and deals during a chaotic time in the markets.
Be Okay With Survival Instead of Growth
Business owners are going to need to focus on dealing with reality on reality's terms in the months to come. Growth may not be the way that your small business survives right now. However, you may be able to preserve capital by working with a CPA to find smarter accounting and tax planning strategies. A better strategy for your financials may actually free up money that you didn't know was being diverted unnecessarily.
Take Advantage of Market Lows
Investor Bill Miller just called the current market downturn one of the best opportunities of his lifetime. It's not a bad idea to follow the advice of a billionaire who was able to run a portfolio that beat the S&P 500 Index consecutively from 1991 to 2005. Miller's advice for investors right now is to take a layering approach to investing instead of putting all of their money in at once. However, he is convinced that the current situation is creating an exceptional buying opportunity. A financial advisor can help you decide if it's time to see this as a major opportunity to make some long-term stock market investments.
Look for Low-Volatility Stocks
Low-volatility stocks have outperformed during the 2020 stock decline. Many of the stocks that are powering through at the moment have consistently done better over longer periods prior to the coronavirus crash. Consider looking at low-volatility stocks for financial opportunities.
Open a Line of Credit While Interest Rates Are at a Record Low
Applying for a line of credit before anything changes may be a smart idea if you want to ensure that you'll be able to float your company for a few months. A line of credit can be used to meet payroll, tax and vendor obligations. Getting a low-interest infusion of cash while the option is still on the table isn't a bad idea even if you have the capital to cover expenses at the moment.
Start Making Partnerships
Many companies of similar size are feeling the same pressure that you are right now. It's a great time to reach out to inquire about partnerships or deals that could be beneficial. This includes things like crafting deals or contracts that allow you to conserve some of your cash today instead of trying to negotiate when you're in a tougher position. If you're local, reach out to publications that normally charge advertising fees that are out of your range. You may also want to see if financial opportunities exist for exchanging services instead of cash with businesses in industries that are connected to yours.
Don't Weather the Situation Without Help From a Financial Adviser
If you own a business, trying to get through the next few months without the help of a CPA may not be realistic. We at Fusion CPA are here to help you make sense of what these unprecedented times mean for your investments, savings and tax planning. We're staying on top of the big changes and developments coming from policymakers and the Federal Reserve to keep our clients one step ahead. You can learn more about our services by clicking the button below to schedule a complimentary discovery call today!
This blog article is not intended to be the rendering of legal, accounting, tax advice or other professional services. Articles are based on current or proposed tax rules at the time they are written and older posts are not updated for tax rule changes. We expressly disclaim all liability in regard to actions taken or not taken based on the contents of this blog as well as the use or interpretation of this information. Information provided on this website is not all-inclusive and such information should not be relied upon as being all-inclusive.