By: John P. Napolitano, CFP®, CPA, PFS, MST

In times like these, you may be feeling that you can’t trust anyone. Understood. But also in times like this, everyone with a pulse is chirping in your ear about something.

Your brother is telling you to sell everything. Your other brother is telling you to exchange one equity position for another. Your neighbor is bragging about getting out just before the collapse. And if that is not enough, many are glued to the financial networks, reading everything that comes across the screen looking for the silver bullet.

If you’re looking for advice on which way the markets are going, today, next week or over the long haul, you shouldn’t trust anyone who delivers their prognosis with confidence and certainty. The only correct answer is that markets will rise and markets will decline. If I tried to embellish and suggest that I know when either is going to happen, your BS detector should sound an alarm. No one knows that either.

What we do know (and you should too) is the rate of return you must earn on your savings to reach your lifetime financial objectives. For most folks, this will require that you take on a certain level of risk.

For example, let’s say that your financial advisor has helped you with the forecast and you conclude that you need to earn 6.72% over your entire life expectancy in order to hit your target. Where are you going to earn 6.72% in today’s environment without any risk? The answer, very simply, is nowhere.

There may be other things that you can do in order to lower that required rate of return. You can spend less, earn more and eliminate certain things from your wish list. If lowering your standard of living and eliminating certain life goals is a fair trade in your eyes for eliminating risk, then get on it. No time like the present to get started on that plan. But if you are more like others raised in a capitalist society, you probably have certain dreams and visions that aren’t consistent with a lower standard of living.

Looking at it another way, what tradeoffs are you willing to make? Are you willing to skip the trip to CA to visit your grandkids versus taking some risk to earn the rate of return required to fund such dreams? Are you willing to work forever so you can save enough at a low guaranteed rate?

If you liquidated your risk assets in 2008 to stay in guarantees since then, you know exactly what I’m talking about. If you panicked mid-way through this current Covid-19 crisis, when do you get back in? Don’t jump back in after you see green on the screen and have your neighbor sending you screaming buy signals. Only jump back in when you understand how much risk you are taking and if that level of risk feels appropriate given the level of spending and wish list items that you wish to accomplish.




John P. Napolitano CFP®, CPA is CEO of US Wealth Management in Braintree, MA. Visit JohnPNapolitano on LinkedIn or The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. John Napolitano is a registered principal with and securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through US Financial Advisors, a Registered Investment Advisor. US Financial Advisors and US Wealth Management are separate entities from LPL Financial. He can be reached at 781-849-9200.  1-972108