What the Silicon Valley Bank news means for your wealth
Look beyond the headlines to understand the impact.
What it means for you
Concerns that other banks may be next to collapse sparked a sell-off in regional bank stocks while prices of Treasury bonds rose as investors sought “safe havens.” Events like this underscore the importance of portfolio diversification to mitigate downside risk while capturing upside.
Edelman Financial Engines portfolios, for example, may diversify across 16 asset classes and thousands of securities.
Moreover, these events are a reminder that it’s a good idea to review your bank accounts to ensure that you are within the FDIC insurance limits. The FDIC insures deposits up to $250,000 per account owner, per institution. Click here to access the FDIC calculator to determine your level of coverage. If you bank at a credit union, click here to determine your level of National Credit Union Administration (NCUA) coverage.
Another reminder: Your wealth plan should have a long-term horizon, measured in decades. That puts you at an advantage. Over time, the market has proven resilient through much worse events such as the 2008 global financial crisis or the recent pandemic, so a long-term horizon may allow your portfolio to benefit from future market recoveries.
It’s important to stick with your plan, stick with the facts and remain invested.