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Investing amid crisis: know the difference between what's happened and what's still to come: financial planner

Chris Manske, certified Financial Planner and 'The Prepared Investor' author joins Yahoo Finance to discuss how to manage your portfolio and what to watch out for in the markets amid COVID-19.

Video Transcript

JULIE HYMAN: Let's talk about what this post-election period now means for your portfolio, how you should be thinking about your personal investments. We're joined by Chris Manske. He's a certified financial planner and author of the book, "The Prepared Investor."

And this discussion is part of our financial advisors corner, presented by PIMCO. So Chris, has anything changed substantially for individual investors after this election? Is there anything they need to be keeping in mind, in terms of either the markets or perhaps the tax picture, given that it looks like we've got a President-elect Joe Biden, and as we try to sort of game out what his administration could do.

CHRIS MANSKE: Well, I think in the big picture, there is very little change. And as administrations come and go, a well diversified portfolio is going to do what the owner wants it to. But in the tactical picture, there's definitely specific things that investors right now want to be thinking about.

And I'd say the two biggest star one, do your homework first. Things have changed a bit. I mean, right off the top of my tongue is the possibility of a new tax bracket. You know, that's something that everybody is talking about. So make sure you've done your homework before you make purchases or sales. This December-- probably there won't be anything changed before the end of the year. But by next December, there could be some changes.

And then, the second would be know the difference between what's happened and what still is to come. It gets really exciting to talk about getting a company like Pfizer in your portfolio after it has already jumped, and everybody was excited about it. So be aware of what has already occurred and what is still to come.

MYLES UDLAND: And you know, Chris, you talked about doing your homework there. And maybe it's just that we're all too steeped in the world of business media, where it seems like there's an endless amount of financial content out there. But I guess with clients you talk to, does it seem like folks are more informed in general these days, that the information that's out there is allowing the current or new generation of investors to have an understanding of kind of the basics here, before they even come to a meeting with you?

CHRIS MANSKE: Well, I think it's a two edged sword. There's the joy of all the information at your fingertips. You can do a quick Google search. There's even people getting financial advice from TikTok these days.

And you know, this sounds a little bit odd. But it's also useful. You know, at the same time that there's a lot of information. It can be overwhelming, there is those specific questions with specific answers that they're right at people's fingertips.

And what's nice is the internet really is a leveling tool that you can use to your advantage. But if you end up spending three hours going into a rabbit hole, unable to tell the difference between fake news and what has already occurred, and what hasn't, you know, that's when it's probably good to bring in a third party, and you know, chat with them. And it doesn't have to be a financial advisor. It could just be someone you trust. You know, just get a friend or someone that you respect. Their opinion means something to you. And you know, having that second voice makes a lot of difference.

- Chris, there's been a lot of bullishness emerge on Wall Street after the election. How should an investor protect their portfolio that a lot of these strategists on Wall Street could be completely wrong?

CHRIS MANSKE: Well, that's a good point. The idea that the market is not for certain going up or not for certain going down is not a new one. So that preparation that people need to make, it's not specific to this moment. It's just be prepared.

In fact, I think that this is a lot like, you know, somebody who puts a spare tire on their car. And they practice changing their tire. They're not doing that just because of that one day they're going to drive somewhere. They're doing it, because they want it to always be in place. And it's the same with portfolio preparation.

There are specific steps that really every investor can easily take to make sure that they're ready for the fact-- it's not a question-- the fact that Wall Street could be wrong. There could be bullish moments. And there could be bearish moments. And it could go the other way. We need to be ready for it.