This week, I’m talking about stock market crashes and the predictable emotional pattern that all crashes follow. If you know how to spot a stock market bottoming process, you’ll be better equipped to take advantage of the amazing opportunities that exist at and near the bottom. 

Today, I’m talking about 3 opportunities you can use your newfound knowledge of market bottoms to take advantage of. 

The first obvious opportunities is rebalancing and rotating money out of bonds and cash and into stocks near the bottom. When you have a diversified portfolio, there are almost always opportunities to add funds to stocks. And if you tend to keep more cash on hand or have a lot of savings in the bank, it’s an incredible opportunity to put that cash to work, assuming you always keep enough cover emergencies that might come up. 

A second opportunity that exists near and at the bottom is tax loss harvesting. You may have stocks or funds in taxable investment accounts that now have losses. You can sell these investments as use the losses to offset gains to potentially reduce your tax bill. You can still buy the stocks back, but you have to wait a month, so the risk is that the investment sold climbs significantly while you’re not invested, but regardless, it’s still an opportunity if you have significant losses from a tax standpoint. 

A third opportunity is for Roth conversions. Since your IRA balances are now lower than they were last year, you can convert a higher portion of your IRA balance to Roth and pay less taxes. 

And a bonus opportunity for anyone taking required minimum distributions from their IRA or inherited IRA balances, those were suspended for this year, which is another tax-saving opportunity. 

That’s it for today. Thanks for listening. My name is Ashley Micciche and this is the One Minute Retirement Tip. 

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