Joseph Sachetta
Retirement is on the mind many people these days, even Sachetta’s own Joseph Sachetta, CFP®, CPA/PFS, MBA, MST. Today, Joseph shares the financial planning principles that he follows–even when it comes to his own retirement planning. While COVID-19 has had a clear affect on market conditions, now is not the time to lose sight of your long-term financial goals.
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Full Transcript:
Hi Joseph Sachetta from Sachetta Callahan. Just wanted to share with you a few ideas. Lately, people have been asking me, Joe, you’re 62 and getting closer to retirement than not. And I do thank you for reminding me of that. Well what are you thinking with respect to the current market situation? And as you approach retirement, first of all, retirement is still quite a ways away for me, but you know, getting close to that that, pretty much what I do is I practice what I’ve been preaching to my clients for many many years. Some of those principles that I practice include the idea of diversification. I often point out to people that diversification is, is not spreading your money all over the place cause that’s confusion. Diversification is consolidating all of your assets in one particular place and then diversify across different asset classes from that one place.
Using a financial planner and investment advisor is a good way to do that. So co consolidation, then diversification. Next principle, you have to maintain an adequate bank emergency cash fund. You say what’s the worst could possibly happen as far as being out of work? Well, I think we’re living through that, this right now, and for those of us that have an emergency cash fund, there’s a little less pressure on us. But those of us that are living paycheck to paycheck, as far as my 401k is concerned, I haven’t altered my game plan at all. I still contribute every pay period to the 401k and if you think about it, with this declined market, I’m actually buying more shares of the funds that I buy. All the market is down in the long run that’s going to pay pay multiple dividends for me.
You know, the other thing to think about is even though I’m 62 nearing retirement, perhaps I could easily live to the age of a hundred. If that’s the case, I need to make sure that my portfolio lasts that long. So I guess panic is not a strategy. You can’t panic in market conditions like this. You have to make a conscious effort to revisit your financial strategy, review your financial plan. We make our financial plans with times like this in mind. That’s why we diversify. That’s why we periodically re-balance. We expect these market fluctuations. Also, I keep an eye on my expenses, trim back expenses at times like this. If I can, I don’t change my asset allocation. I’m not trying to time the market. What I do do for myself and for the clients is we rebalance the portfolio. That means periodically selling off some of the holdings or buying different holdings in an attempt to reallocate the portfolio.
We’re not trying to time the market, we just try to practice the principle of buying low and selling high. So all the stocks are up. We sold them off a little bit and while the stocks are on sale in times like this, we buy it from them through the mutual funds and exchange traded funds that we use. Buy low sell high. Doesn’t have to be buy highest, buy lowest or sell highest. Just stick to the strategy of periodically rebalancing. We don’t want to do anything in this situation to derail our longterm financial plan because my retirement, our retirement ,depends on that portfolio lasting us maybe till age a hundred. Feel free to give me or anybody on the staff a call if you wanted to discuss any of these principles. We’re here to serve you and welcome the opportunity to do so. Thank you and stay safe.