As Trump’s tariff plans launch a trade war and a plunge in the stock market, safeguarding one’s finances remains the priority.
However, financial advisors suggest that this may not be the right play, and that a rushed move could result in an even worse outcome. Advisors shared with Fortune that investors should tread away from the panicked frenzy and ride out one’s investment until the market waters calm.
“Resist the urge to shift out of stocks entirely,” Christine Benz, a director of personal finance and retirement planning for Morningstar, a financial markets research firm. “Such a move could buy you some short-term relief, but it will soon be replaced by another nagging worry: Is it time to get back in?”
For young professionals nowhere near retirement age, risk management experts think that the stock market is still one’s oyster. Taking advantage of lower prices now could lead to bigger gains in the long term.
For Williams, a retirement account should be stored away in the back of someone’s mind, as daily worries about the ebbs and flows will take away from the long-term satisfaction.
“Market drops test investor resolve,” he said. “It is counterproductive to look at your retirement account daily. Instead, view your investments as part of a long-term strategy that will overcome market corrections, grow and support retirement.”
For those a little closer to retirement, experts think placing funds in conservative investments may yield better results, especially in crunch time. Backing out of the more shaky indexes for bonds and cash will help those on their way out of the workforce.
“There is no way to go back and change your portfolio in the past, you can only plan how to manage it in the future,” says Stephen Kates, a certified financial planner and financial analyst at Bankrate. “Invested money should never be at risk of needing to be withdrawn in the short term. Investors with ample time to stay invested should remember how lucrative patience has been over the last 15 years.”
Source: Black Enterprise
