The Right Time Without Timing

Many financial planners – including me – will tell you that market timing is not a good idea.  But that doesn’t mean that we should all bury our heads in the sand and ignore opportunities.  It’s a fine line, but there is a difference.

One example is the current mortgage rate environment.  Look at whether it makes sense to refinance your mortgage while rates are still low.  Whether you want to lower your payment, stretch out your payments over a longer time, or let a lower rate so you can get the mortgage paid off more quickly, now is a time to explore that.  But be careful.  There are mortgage lenders who will refinance anyone who asks without looking at whether you improve your situation with a refinance or not.  So get some good referrals on who to work with.

It’s also a good time to buy up in terms of housing.  Yes, you may get less for your little house than you feel it’s worth.  But all factors being equal, you lose less on selling your small house than what you save on buying a bigger house.  In other words, let’s say you get 10% less on your $200,000 house (lose $20,000), but you save 10% on a $350,000 house (save $35,000).  You’ve come out ahead.  Once again, having a realtor who can tell you if that’s the case is vital.  So don’t just pull out the phone book and start shopping.  Get a good referral.

If you think it’s time to change your portfolio approach, this may be the perfect time to do it.  If you took a bath on your individual stock portfolio and want to move to mutual funds and ETFs, this is probably a great time.  That portfolio change might have cost you big bucks in taxes a year or two ago.  But you might actually get some tax losses if you make that move now.  And – at the risk of sounding like a broken record – talk to a good financial advisor about it.  This is definitely a time when you want a fee-only and not a commission or fee-based professional.  If someone makes big bucks over making the changes, you may never know if the change was in your financial interest or theirs.  The good ones are still alive and well in this economy.  Look at http://www.acaplanners.org/Advisors.aspx  or http://findanadvisor.napfa.org/Home.aspx  to find one.

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