The two worst strategic mistakes to make are acting prematurely and letting an opportunity slip; to avoid this, the warrior treats each situation as if it were unique and never resorts to formulae, recipes or other people’s opinions.
–Paulo Coelho 

When you’re in a situation, you can complain about it, you can feel sorry for yourself, you can do a lot of things. But how are you   gonna  make the situation better?
–Tony Dungy 

There is no doubt that our country, and our world, are facing some very serious challenges ahead. COVID-19 has caused hundreds of thousands of illnesses, tens of thousands of deaths, and serious economic harm to millions of people throughout the world. I hope everyone is doing what they can to minimize the spread of the disease. You can see what the CDC recommends to do that here. However, there are opportunities that present themselves to us during this time that could place us in a better financial situation in the future. What are those opportunities and do they make sense for you? 

The first assessment you need to make is whether or not you have some income security. Will you have enough money coming in to cover your bills? Do you have adequate savings to get you through these tough times. If the answer is yes then you can start looking for opportunities where they exist. 
 
1) Refinance your mortgage. Interest rates are a little higher than they were a week or two ago but still extremely favorable. Even if you refinanced a couple years ago you may be able to get a better deal today. The general rule of thumb is if you can save 1% on your mortgage rate you should do it. Every situation is unique so make sure to do your due diligence and review it with your financial professional. You really need to pay attention to the fees, especially with small loan amounts, and also take in to consideration if you plan on moving in the near future. 
 
2) Roth conversions. Many more people have traditional IRA accounts vs Roth IRA accounts. A good description of the differences are here. The short version is that with a traditional IRA you have put the money in pre-tax. You likely received a tax deduction in the year you contributed the money, the money grows tax deferred and when you take out the money you will be taxed on 100% of it at withdrawal (there could be a penalty for withdrawals before the age of 59 1/2). With a Roth IRA you do not get the tax deduction at contribution but all of the money you withdraw in the future will come out income tax free (there could be a 10% penalty on pre 59 1/2 withdrawals). You are limited to how much you can contribute on an annual basis to both plans and with the Roth there are income limitations that reduce or disqualify you if you make too much money. 
 
In a down market, when you expect that the market will recover, is an optimum time to convert an IRA to a Roth. To convert, you pay taxes on the fair market value of the taxable portion of the IRA. So, if you have an IRA invested in XYZ ETF, which is down 30% and convert to a Roth, you pay taxes on the fair value. If it recovers, you will have made the gain tax-free. 
 
There is also the tax bracket consideration for a Roth conversion. If your income is down as well, you can pay taxes at a tax rate lower then you normally are in. There is also the risk that tax rates will move higher in the future. If tax rates go up across the board in the future it would have benefited you to pay taxes at the lower rates of today. 
 
Conversions can be a tricky maneuver and I highly recommend talking to your financial and/or accounting professional before making any conversions. 
 
3) Keep to your long-term investment plan. If you are contributing to your 401k, 403b, 457, IRA etc. plans keep doing it. The temptation is to reduce contributions during times of uncertainty. If you believe the stock market will rebound, which many do, keep buying. My wife and I have continued the funding of our plans. We are purchasing many assets at 20-30% below what we were buying them at 6-8 weeks ago. If the market goes down another 20% we will still be buying. It is totally reasonable to reduce contributions IF you need the cash flow. If you do not need it then continue your contributions. It might even make sense to increase the contributions depending on your own personal situation. 
 
4) Tax loss harvesting. If you’re investments are down you may be able to sell them and deduct the loss, up to $3000 for married filing jointly, from your income tax. Be careful of wash sale rules which means you can’t sell and buy back the same stock/etf within 30 days. You will also need to keep track of cost basis. The following are important notes pertaining to tax loss harvesting.

• It applies only to investments held in taxable accounts 
  
• It’s not as financially fruitful if you’re in a low tax bracket 
  
• Tax-loss harvesting is most useful if you’re investing in individual stocks, actively managed funds and/or exchange-traded funds 
  
• You must keep long term capital gains (investments bought and held longer than 12 months) and short-term capital gains (investments bought and sold in less than 12 months) straight 
  
• The upside of losing is limited to $1,500 to $3,000 a year depending on individual or joint filing. You can carry losses forward to future years. 
  
• Don’t sell your losers just to get the tax break. If it doesn’t make sense to sell for your long-term plans don’t sell. Don’t let the tail wag the dog here. 
  
• Put the cash from the sale to good use. Use it to rebalance your portfolio, give yourself some different exposure etc.

As you see tax loss harvesting is not the easiest thing to undertake so I recommend working with a qualified tax-professional when executing this strategy. 
 
The past several weeks have been trying on everyone. It’s human to have felt it and it’s something we should all be comfortable talking about. In the midst of all this we must do our best to not let the anxiety or sense of panic overcome us and remain calm. It is with this sense of calm that we can remain clear eyed and see the opportunities that may present themselves to us. We will get through this together. When we do I want you to be in the best position possible to reach all your goals, dreams and desires.