One of their recommendations is that you invest money that you are sure to need for retirement in conservative investments and only take risks with money that would be nice to have.Ĥ. Consider Lifecycle Investing: Lifecycle investing is an investment philosophy championed by Zvie Bodie, Robert Merton and other esteemed economists. That way you can make investment decisions based on something and not just the way the wind is blowing.ģ. But you should have a reason for being invested in whatever way you are invested. Be Informed: Financial markets are incredibly complicated. This is the single biggest reason that retail investors typically lag overall market performance.Ģ. Retail investors (regular people who invest their money themselves) very often get nervous and sell at the market bottom and then don’t re-invest and so miss the market recovery. We can not predict what will happen, but acting calmly is bound to serve you well. But those who remained calm and stayed the course were rewarded with a big bounce days later. Take a Deep Breath and Don’t Act Rashly: Watching the stock market close nearly 600 points down on Augwas not fun. Here are seven tips for retirement planning and weathering financial turmoil:ġ. Knowing how to handle stock market turmoil is important for your peace of mind and for your financial health. Will your retirement portfolio be up or down tomorrow? What about the next day? Now they are bouncing up and down every day with big swings - which can often indicate that more volatility is in store.Īnd, in fact, the stock market point gains and losses in August of 2015 are approaching those experienced in the financial crisis of 2008 and the Great Depression in the 1930s. Stocks around the world - including in the United States - followed suit. And what is happening now? Stocks in Asia plummeted.
The financial crisis that started around 2008 severely impacted the retirement security of many people around retirement age. Don’t panic when financial markets go into turmoil.
But when stocks fall in the short term, it is particularly troubling for those of us who need money for retirement. The saying: “what goes up, must come down,” is not always true of the stock market over the long term.
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