For anyone paying attention, the War in Iran and oil prices has the stock market going in one direction over the past week….Down…Way Down. I wouldn’t call it a crash yet. As a matter of fact, I would take this opportunity to do two things.
- Buy the dip. I can’t predict when things will recover, or how far they will dip before they do. But I still see this as a buying opportunity, especially for you younger readers who have plenty of time to let it sit and grow.
- Think about the make-up of your portfolio and where you are in life.
Here’s some more of what I mean regarding that. Think about your financial goals and how close you are to retirement. I am (hopefully) less than 10 years away. I have a healthy balance of growth stocks and dividend stocks. As I get even closer to retirement, I will be shifting even more towards the dividend stocks for supplemental income. Right now, I like the dividend stocks to have a little extra cash on hand when I need it. The negative of dividend income right now is that you get taxed on it. Growth stocks, if you hold them as you should, will likely increase in value. But since the gains are unrealized, you don’t get taxed on them until you sell. And by the time you sell, they will be taxed as long term capital gains obviously.
So evaluate your portfolio and think about when it makes sense for you to make some adjustments.
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