| The stock market can't sit still. Why you should | | |  | WED, JUN 17, 2020 | | | | I had an uncomfortable conversation with a friend last week.
While he admitted he didn't want to tell me, it slipped out and he said he was so nervous about market risks that he could no longer watch as his portfolio continue to take huge hits. So, he sold a majority of stocks (at a big loss) in March and April. He wants to retire in a year or two year and said he couldn't handle waiting for a possible rebound. My heart sank and he knew he was about to get a lecture from me.
While I believed my friend made a terrible (yet difficult) financial decision, I understood how frightened he and millions of Americans are as they get closer to retirement.
The current climate is very scary, but you do have some options. So, here comes the lecture.
As I reminded my buddy, during the 2008 financial crisis, investors who stuck it out and kept adding to their nest eggs and invested automatically through those years did great because of the market's amazing recovery.
As for this current gut-wrenching environment, there are some other things to consider versus selling everything.
One of the first things to consider is how much you have saved and if you feel ready to retire. If you feel like you are truly behind in your savings, it makes sense to postpone that retirement party by a few years. By doing this you can keep some form of income and add to your savings. It also makes sense to postpone collecting social security benefits.
Financial advisors that I speak with recommend that individuals who are approaching retirement gradually reduce their exposure to riskier assets. The plan is to increase exposure to more conservative investments.
For more key stuff like this, please follow me on Twitter @jimpavia and check out CNBC's Financial Advisor Hub and CNBC + Acorns Invest in You: Ready. Set. Grow. | | The stock market can't sit still. Why you should | | If the pandemic has taught investors anything it's that they can't predict what's going to happen next to their portfolio. Their best bet is to hope that what's been true over the last century hasn't changed: over the long-term, stocks go up in value. | | | | | | Tax Day is about a month away. Are you ready? | | Whether you're rebuilding your cash cushion or you're squirreling away a few dollars for a summer getaway, make sure you claim your 2019 tax refund from the IRS. Federal income tax returns are due July 15. | | | | | | Feelings drive short-term prices | | "I had an interesting conversation with a friend this morning about the stocks he holds, and the roller coaster ride they've been on over the last few weeks..." | | | |
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