Wild. That’s the ride of the stock market today. Up 500, down 1,000. Every day it is a new shock. You look at your holdings and a sign flashes in front of your eyes: DANGER. DANGER. DANGER.
But don’t panic.
Here are three ways to think about it:
- Don’t look.
If you have 30 years to go before retirement, just don’t look at your 401(k) numbers. Just don’t. Keep contributing. You have years for the market to rise and it will. Don’t look. Don’t sell. Keep putting money in.
- Breathe deeply and peek.
If you are a couple years from retirement, take it easy. Even in your 60s, you are still a long-term investor. However, you might want to rebalance your assets. As you near retirement, maybe fewer stocks are best along with other more secure investments. But, on the other hand, if you think the current crisis will pass quickly, just breathe.
What you can do before retirement, is make sure you don’t have credit card debt, but do have a stash of emergency cash.
Don’t make any hasty moves. Talk to a financial advisor.
- Breathe, peek, and maybe put off that vacation.
If you are retired in the current crisis, you’ve seen that fat load of earnings of the last two years circle the drain. Everyone has. It is not just you. But, yeah, you’re retired.
Maybe don’t draw from the IRA to pay for that fancy vacation. Sorry. Should have done that last year.
Have a little gratitude. You probably lived free on earnings for the last year or two.
Talk to your investment advisor about risk and rebalancing. But it is not a good time to sell. You know what legendary investor Warren Buffet once said when asked if he lost money during the drop: No, he said, I didn’t sell.