For now, it appears that many of the worst impacts of COVID-19 might be behind us. Hospitals are not overflowing. The stock market is recovering. There is increasing optimism about the potential for a vaccine.

As a result, we’ve heard a lot about the efforts of states to “reopen” their economies. The reality is a little more complicated than that. One way to think of it is that we are leaving the door ajar. We are observing, people are heading out more and more. The markets are responding. But this was never going to be a light switch event, where we wake up one day and everything is normal.

With that in mind, it’s worth assessing what reopening might look like and how that might impact your finances.

We’ll Need to Meet Certain Conditions

First and foremost, health systems will have to be ready for an uptick in cases. Most governors are tethering reopening plans to hospital preparedness. Per the White House reopening plan, the rate of infections, hospitalizations and deaths must be declining, and states need to see an increase in test capacity.

As a result of the well-warranted caution, the economy will take some time to fully recover. Unemployment is at 14.7%, so it would take time for people to get back to work under the best of conditions.

We’ve heard a lot about “V”-shaped recovery, which effectively means that the economy bounces back to where it was. Our recovery might look more like the Nike swoosh. A recent Bloomberg survey shows that economists estimate the U.S. GDP will contract by about 30% in Q2 of 2020. A full recovery may in fact not happen until a vaccine is available

Expect scary headlines

Between the election season and the nature of the 24-hour news cycle, you can expect plenty of dramatic news coverage. This will some market jitters, volatility, and fluctuations in the stock market.

But it’s important to keep perspective. We have made progress against this virus and containment has largely flattened the curve. The federal government has shown to be responsive in filling the gap created by mitigation efforts.

Take Action

We always tell you not to panic, and that is truer than ever. While you should not take hasty action in response to market fears, you also can’t be complacent. Here are three things you should consider now.

Take advantage of the down markets. Consider tax-loss harvesting, Roth Conversions, or refinancing your mortgage now while the markets are still down.

Build up your emergency fund. If we see spikes in cases, we may have to go back into shelter in place for a period of time. Having an extra couple months of income on hand will prove helpful.

Don’t let pandemic fatigue set in. Practice social distancing and safe hygiene, especially as states reopen and your exposure is likely to increase. The last thing your body and your finances need now is an extended hospital stay.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

Peg Webb

Peg Webb

Senior Vice President, Financial Advisor & Host of the “Your Money” radio show

Series 7, 53 & 63 Securities Registrations,1 Series 65 Advisory Registration,† Insurance License Peg was attracted to the financial services industry early in her career. She feels fortunate to be able to use her 30 years of in-depth knowledge working alongside Preston, the Roundtable™ and their staff to prepare clients for retirement. A lifelong learner, she enjoys collaborating with her team to stay on top of the best practices regarding comprehensive planning....Read More