All Star Advice

Financial Planners, investment gurus, realtors, tax advisers, and insurance agents share their best advicein their own words

I advise my clients to decide what they want to do (e.g., buy, sell, hold, refinance, etc.) based on their life, their family’s needs, and their vision of how they want life to look going forward—not based on an effort to time the market. The time to take market considerations and timing into account is when you’ve decided what to do and you’re formulating strategies and plans for executing your decision. That includes questions such as how much to offer for a property, what type of loan to use to finance your purchase, and how much to list your home for. Most often, the data you’ll need in order to make smart, strategic plans is not the scary stuff of newspaper headlines. Real estate markets are hyper-local, so you need to rely on local, up-to-the-minute data like the ratio of list price to sale price of the homes in your neighborhood.

To generate income after a layoff, swallow your pride­—then try consulting.

Now is not the time for pride. You must do whatever it takes to have some income coming into your household. One thing unemployed executives can do is consult. Small business owners are looking for expertise at reasonable rates, for people who can come in and help with certain aspects of their business. They don’t want to pay what it would cost to bring in a major marketing firm, for example. Charge a reasonable rate for so many hours, and raise their marketing efforts to the level they want. There are a lot more small business owners than major corporations. Show your track record, show the work you’ve done. When talking to prospective clients, don’t focus on the fact that you’re laid off and this is why you started consulting. Be confident, and have a portfolio. Maybe do some things for free first and get some testimonials—and walk into the meeting with that.

When the time comes, dollar cost average your way out of investments.

I don’t think the current environment should dissuade anyone from investing. The economy highlights how critical it is to make sure you’re investing in a way that corresponds with your goals and the timing of those goals. One of the reasons people find themselves in a really precarious situation is they didn’t apply the principle of tying their investment choices to the time they would need the money. So, if you have plans for your money within five years or less, it needs to be more liquid. If you have money in the market, say in stocks or mutual funds, as you get closer to attaining your goal—just as people dollar cost average into the market, you should develop the practice of dollar cost averaging out of the market until you have the cash in hand to meet your goals. Do this in a stepladder sort of way—each year take out a little more and reduce your exposure to the market’s volatility. This is a great risk management technique and will prevent you from potentially liquidating investments at a time when you might actually lose money.

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