Recession, bear market, inflation — it can be hard to focus on the future when you hear these terms. But, for millennial investors, market corrections mean opportunity.

Here are five impactful actions to consider:

1. Just Keep Buying

You probably don't hesitate to shop a consumer sale, but many investors get spooked when stocks decline. For long-term investors, lower prices are a gift.  Treat yourself!

2. Increase Retirement Contributions

What’s better than continuing to buy? Upping contributions. I recommend increasing contributions anytime you get a raise or promotion — but if you can, increasing your retirement contributions during a correction could pay off big time when you’re ready to transition from Monday morning meetings to Monday afternoon margaritas.

3. Tax-Loss Harvesting

Selling investments at a loss can help offset gains (or future gains if you don’t have gains in the current year), lowering your burden to Uncle Sam. But remember, tax-loss harvesting is a tool that shouldn’t undermine your overall investment goals and strategy.

4. Rebalance

Volatile markets can shift portfolios away from their allocation targets. A market correction can be an excellent time to reset to those targets while minimizing realized gains (and saving some $ on taxes).

5. Roth Conversion

There’s always a silver lining. For many investors, down markets are the perfect time to execute a Roth conversion. A traditional IRA is a tax-deferred vehicle funded with pre-tax dollars. Conversely, a Roth is funded with after-tax dollars, meaning you pay taxes upfront. When you convert funds from a traditional to a Roth, you’ll have to pay taxes on the amount converted. When portfolios are down, the taxes owed will be lower since the total conversion will be smaller. It’s essential to weigh the costs and benefits of a traditional and Roth IRA before executing a conversion (see the flow chart in the free resources section below).

Check out these FREE resources:

Should I Consider a Roth Conversion - Flow Chart

What Issues Should I Consider During a Recession or Market Correction - Checklist

Should I Contribute to My Roth or Traditional IRA - Flowchart

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