Many Americans on retirement’s doorstep are anxious about the market right now, asking “What is the best thing to do if the market keeps crashing or we go into another recession when I only have a few more years to go before retiring?”
Last week was a rocky one for the stock market. In a single day, the Dow dropped 832 points, which constituted one of the most substantial declines in its history. The S&P 500 and Nasdaq also dropped, so if you checked your portfolio at any point last week, there’s a good chance your first inclination was to sell before things got worse. And you’re not alone… the most recent Wells Fargo/Gallup Investor Optimism Study found that:
- Most U.S. investors expect stock market volatility to continue throughout 2018 (81%) rather than settle down before year’s end (19%).
- Sixty-five percent say the “worst is ahead of us” in terms of volatility, with 35% saying the “worst is behind us.”
- At least six in 10 agree that volatility has caused them to pay closer attention to their investments (62%) as well as to the market as a whole (59%).
- Fifty percent surveyed say they’re ‘very worried’ about the impact of the U.S. political climate on our financial markets.
Volatility is a cornerstone of the stock market, and it isn’t actually something to be afraid of.
Stock market fluctuations are completely normal and even somewhat predictable. The fact is, the stock market has been repeating itself consistently enough throughout history to allow us to see in it predictable and repeatable long-term patterns, or market “biorhythms,” which are important to recognize and understand when it comes to building a smart, defensive investment strategy.
When to Act
Of course, this doesn’t mean you have to sit back, do nothing, and let those market dips play out. It’s critical that you first craft a retirement-income plan. Those who have such a such a plan don’t worry about market declines.
The CKS Way
CKS Summit Group is most interested in what you want out of life.
We believe professionally managed tactical stock market and non-stock market portfolios can provide healthy, long-term upside growth potential. It can also be very effective at preserving principal while allowing for a high degree of downside risk protection.
The right mixture of carefully chosen non-stock market and managed market accounts can create a blended portfolio which is capable of producing increasing income, stable growth, preservation of principal, safety and flexibility all at the same time.