6 Ways Advisors Can Prepare Clients for a Post-COVID-19 World

The silver lining is that for the 2020 tax year, individuals can make direct contributions to charities and to be able to deduct the full charitable deduction against their income. It's a one-time incentive allowing taxpayers to in effect shield some income through previously limited deductions while also helping philanthropic organizations when they need it most.

4. Invest in the Future

This is also a great time for parents (and grandparents) who may have some cash that they feel they don't need to invest in the future by contributing to their child's 529 educational plan at low values. The value of the mutual funds offered in most 529 plans are undoubtedly down in value and so much cheaper to buy right now.

5. Stay Invested

History has shown the importance of remaining invested. Those who move everything to cash when markets go south find it a lot more expensive to get back in when values start to climb. Being out of the market on those days when it makes huge jumps upward can be especially difficult to make up for.

If the client has losses in their portfolio, then this is a great opportunity for some tax loss harvesting. I generally will advise clients to sell a stock that's declined in value to take the tax loss but to then purchase a proxy in the same industry to maintain diversification and exposure.

For example, if we sold a big bank stock, we might buy the ETF covering the banking industry, that way the client is still exposed to financials but has losses which are very valuable from a tax planning perspective.

Of course, it's one thing to say stay invested, it's another to know where. That's certainly the big question facing investors, and their advisors.

In the face of the pandemic the most obvious sectors are technology and health care. Other areas that are currently relatively inexpensive and could present opportunities for investors willing to do their homework could be housing and financials.

There's no doubt that the current crisis has changed how and where people shop. So, certain consumer stocks could also make sense, particularly online retailers. Traditional brick-and-mortar retailers, who were already struggling, are probably best to avoid, as the May 4 Chapter 11 filing by J. Crew has shown. Other recognizable names like JCPenney and Sears may not be far behind.

6. Stay Positive

This last tip may be the most valuable from a psychological perspective. It's important to remember that markets are cyclical and so is life. We've been through tough times before — world wars, 9/11, the global financial crisis — and we will be again. There's always a light at the end of the tunnel, we just have to keep pushing toward it.

In the meantime, do everything you can to position yourself to come out the other side in the best shape possible. That includes things like continuing to contribute to 401(k) plans at the level providing the most company matching funds and revisiting estate plans to make sure they accurately reflect the current situation and testator's preferences.

And above all, don't lose hope.

Kenneth Van Leeuwen is managing director of Van Leeuwen & Co., a wealth management firm he founded in Princeton, New Jersey, in 1997.