7 Things Veterinarians Can Do With Their Finances When The Markets Go Down With the markets whipsawing around this year I thought it would make sense to discuss some of the smart actions veterinarians canundertake when the markets go down. This was not the first market downturn and it certainly will not be the last so why not take advantageof some of the opportunities that arise during these down periods? Destroy Your TelevisionMy personal favorite. Rock, hammer, water? Whatever your preference is, make sure you do this first. Nothing, and I mean nothing willcripple your finances like listening to the market pundits who predict the sky is falling every other day and also think they know when “it istime to buy.” Do yourself and your finances a favor… don’t listen to that junk. It’s meant to make you scared. That is what some peoplefeed off of. One of the biggest determinants of wealth creation is time spent invested - simple as that. The problem is so many peoplegive in to fear and greed along the way that they never let their ultimate resource work for them, the time they spend invested. Stay off thestock channels! Roth IRA ConversionThe basic premise here is that your traditional IRA is worth less when the markets go down, so by doing a Roth conversion you are payingtax on the converted amount (remember… this is less because the markets went down) and getting the funds into the tax superior RothIRA. Then, when markets eventually recover, you have your funds sitting in the Roth, which allows for a multitude of planning techniquesand tax-free income. Again, nothing fancy here and it does take discipline to take the tax hit when you have seen your net worth fallsubstantially, but in the long-run you will be very happy you did. Lowering Concentrated/Entrenched Gain Stock PositionsThis is best described with an actual example. Let’s say you have some concentrated stock in XYZ company. It makes up a hypothetical40% or your overall portfolio. You own it at an average cost of $50 and it has been trading around $100. Normally, if you sold some of thestock, you would realize a large amount of taxes. Now let’s say the markets sell off as they did to start the year and that same stock is nowat $75. You could sell part of it and move the funds into a low-cost ETF. The idea being that when the markets eventually recover, both theETF and the stock of XYZ company should both trade back up but now you will have less of the concentrated stock and more of thediversified low-cost fund, and you did it while realizing less taxes. Tax HarvestingReally this should be looked at throughout the year. When the markets trade down, there are usually opportunities to improvediversification or lower investment fees by utilizing offsetting gains and losses from various positions. Additionally, if your taxable incomewill be lower in a certain tax year, you can strategically take gains up until your next marginal tax bracket. This requires your advisor andCPA working in sync so that you are not bumped into the next marginal tax bracket. RebalancingWhile most people tend to panic when the markets crater, the proper thing to look for is an opportunity to rebalance. Rebalancing is assimple as selling what has gone up and buying what has gone down until you are back to your “normal allocation.” What is your normalallocation? I have no clue. That depends on a multitude of factors that you and your advisor have discussed. You have, right? The bottomline is that a baseline investment allocation should be what you maintain through thick and thin. The only time it changes is whensomething changes to your specific financial plan… not a change in the markets. Dollar-Cost Averaging Into InvestmentsThis piggybacks off of rebalancing. Depending on your investment & financial planning, you may want to buy a predetermined amount ofinvestments in a systematic manner. For example, you decide to invest $2,000 a month in the markets no matter what they do. What thisdoes is it assures you are not getting the top or the bottom of the market and removes any market timing guesswork! You are smoothingout your purchase price because chances are the market will be higher some months you invest the 2k and lower in other months. Thiswill result in an average cost basis that assured you did not invest all of your funds at the top of the market. The same can’t be said if youput all your money in at once. Speak With An AdvisorUnless you are the DIY type who loves getting involved with the above, speak with an advisor who will take the time to listen to your goalsand unique situation. This is by no means an all-encompassing list and there are many other opportunities that present themselves notonly when the markets go down but also when they go sideways, up, and zigzag. Converting from a traditional IRA to a Roth IRA is a taxable event. A Roth IRA offers tax free withdrawals on taxable contributions. Toqualify for the tax-free and penalty-free withdrawal or earnings, a Roth IRA must be in place for at least five tax years, and thedistribution must take place after age 59 ½ or due to death, disability, or a first time home purchase (up to a $10,000 lifetimemaximum). Depending on state law, Roth IRA distributions may be subject to state taxes.A diversified portfolio does not assure a profit or protect against loss in a declining market.Before investing in ETFs and mutual funds, investors should carefully consider a fund's investment objectives, risks, chargesand expenses. Fund prospectuses contain this and other information and may be obtained by asking your financial advisor.Read prospectuses carefully before investing.Rebalancing may be a taxable event. Before you take any specific action be sure to consult with your tax professional.Dollar cost averaging will not guarantee a profit or protect you from loss, but may reduce your average cost per share in a fluctuatingmarket.