What’s the first rule of investing in the stock market? Buy low, sell high.
Despite the record highs the market has experienced over the past year, many people are putting undue faith in the chance that this uninhibited growth will continue. It seems that many retirees are looking at this favorable market trend through rose-colored glasses and have forgotten the pain and uncertainty felt by the recessions of years past.
During the last recession, we met with hundreds of individuals who said they wished they had been better prepared in the case of a substantial market downturn. Many had just retired and were left wondering how they and their families would manage financially now that their retirement accounts had devalued to a shocking 60% of what they had been previously. Those who were approaching retirement were forced to delay leaving work until well into their 70’s. In both of these situations, far too much faith was paid to the apparent stability and upward growth of the pre-2007 global market.
Unfortunately, the lessons learned from past market fluctuations and recessions have been largely forgotten over the past decade, in large part due to the steady growth and recovery we’ve seen. More than half of current retirees have over 50% of their assets in high-risk stocks or funds that could be drastically reduced if met with another market downturn. With overwhelming data from financial institutions from around the globe predicting a recession within the next 12-18 months, there is no reason an individual of retirement age should have to experience the recession-associated loss again(1). We’ve been through this before, we have the tools – now is the time to create a better, more secure plan for our future.
If you are nearing retirement or are already retired and would like a comprehensive review of your accounts for market insulation and stability, we’re here to help. Strategic planning for an eventual market downturn is essential to ensuring your current and projected income sources remain intact, regardless of market performance. Our specialists design retirement plans that capitalize on the previous decade’s market gains while safeguarding against future losses.
To speak with a retirement specialist, click here.
1. Nova, Annie. “Baby Boomers, Heavily Invested in Stocks, Are Putting Retirement Savings at Risk: Study.” CNBC, CNBC, 20 Mar. 2019, www.cnbc.com/2019/03/20/baby-boomers-are-putting-their-retirement-savings-in-jeopardy.html.