In this article, in AARP’s Senior Planet publication, David Schneider points out that “Everyone should remember that market declines are normal, even though they happen for different reasons every time,” and that “Market jitters are a recurrent theme in history, even if the reasons for these bumps in the road may change.”

 

“So, investors shouldn’t mistake a dip for the end of the world,” he goes on to say, adding that “We made it through the global financial crisis. We made it through COVID. Over 20 years ago, we made it through the dot.com bust, and the odds are we will make it through this. So, it’s worth it to remember that market declines are a normal part of the economic cycle, even if the specific triggers vary.”

 

He also states, “I also would say it’s generally advisable for retirees to avoid making investment decisions based on headlines, developing and adhering to a personalized plan that aligns with their goals and risk tolerance is a more prudent approach.”

 

It’s time to plan

 

The article mentions “It’s a good time to plan. Schneider says the key now is to protect the gains in your portfolio that you’ve already seen.

 

Three to five years of expenses should be kept in cash or short-term fixed income instruments. “Today it is possible to get a 4% return on cash, so it’s not like they’re leaving a ton of cash on the table, but if the markets go down you won’t need to sell at fire-sale prices to meet living expenses. The stock market is a long-term investment, so short-term money just doesn’t belong there.”

 

Read More: AARP Senior Planet