Anchor: Welcome back to KCCI. It’s 6:24 now. We’re here with Kurt Pearson from Compass Financial and we are talking about the ups and downs of the stock market, the volatility and also what the Fed is going to do.
Anchor: Yeah, it’s been up and down so much so those of us who are contributing to 401Ks, what should we be doing now?
Kurt Pearson: Well, first thing it’s to do your own math and make sure you know what your returns are compared to some of the indices that you like to benchmark against. That’s step number one. You may be surprised when you do that math because you may begin to believe, “Hey my account is traveling with what’s happening in the stock market in general.” You may be pleasantly surprised or not. But that’s the first step is to do your own math. And then take a look at “Ok, do I want to make some minor adjustments at this point?” Technically the S&P 500 isn’t even in correction territory yet. It’s only been down about 9% from the high to the worst place so far, so correction mode is pretty typical in the stock market. It can happen fairly regularly. We’re also in a seasonal pattern where September and October can sometimes show some weakness in the market. Not every year, but sometimes, so it’s good to take all those things into account. So you might want to make a few minor changes, but also step up your monitoring so you don’t forget about it so that more regularly you’re taking a peak.
Anchor: What about people who are living off the income from their investments? Any specific changes they need to make?
Kurt Pearson: Yeah, very different scenario because when you look at a total return from an investment, you usually look at what’s happening to the share price and what’s happening to the dividends. So theoretically those who are getting income from their portfolios will be more focused on the dividends. Dividends, production. Maybe hasn’t changed a lot, maybe the share prices have but it’s good to look at that total return to get that total perspective and you may realize that “Hey, my income stream is still coming to me. Maybe I don’t want to make any knee jerk reactions during this time of volatility.
Anchor: Just know what’s going on with your finances.
Kurt Pearson: Exactly.
Anchor: Thank you Kurt for coming in. Great tips. If you have questions for Kurt about your money you can call him at Compass Financial at 327-1020.