Lauren Crosby Medlicott
5 min read
-
Taylor Nissi is a senior VP and wealth advisor at the wealth management firm Farther.
-
He shared his top tips he would give to clients navigating recent market volatility amid tariffs.
-
Nissi said everyone should have three buckets: emergency fund, growth strategy, and retirement plan.
This as-told-to essay is based on a conversation with Taylor Nissi, a wealth advisor at Farther. It has been edited for length and clarity.
It's important that people have a financial plan they can refer to during times of economic uncertainty.
In the current climate, people may want to reevaluate their risk strategies for their investment portfolios and cash management.
As a wealth advisor, it's my job to help both small business owners and employees through this time of economic uncertainty. Here are my top tips.
We like to say you should have three buckets. The first bucket is your emergency fund, the second is your taxable growth strategy, and the third is your long-term retirement plan.
Having a financial plan gives people a reference point to return to during market fluctuations. It can help with decision-making in times of high anxiety.
Everyone should prioritize building their emergency fund or "first bucket." Your emergency fund is a way to prepare for market risk and life risk.
If your household has one income, you should have at least six months saved in your emergency fund. If you have two incomes — either two income earners, one person with two incomes, or a person with one income and a trust fund — that number could drop to three months.
Any other money you know you'll spend in the next 24 months, a college tuition to pay or a house down payment, for example, should all be added to your emergency fund.
This money should be held somewhere that it can be easily converted to cash without affecting its market price. You want something safe, easy to access, and earning a little interest: High-yield savings accounts, money market accounts, or short-term CDs are all good.
The "second bucket" is your taxable growth strategy: investments to help your money grow, even in accounts where you pay taxes, like a regular brokerage account. We've been talking with a lot of clients about how they felt when the market crashed in early April. Our clients hold a lot of wealth in stocks and were very uncomfortable.
If clients were very stressed or couldn't sleep at night, then we'd look at their "second bucket" and change the allocation of their portfolio to more bonds and fewer stocks.
