2020 has been a roller-coaster ride for investors in the stock market. Navigating a retirement portfolio during the coronavirus pandemic presents challenges. To provide some insight on the best financial planning strategy to deal with the volatility Sterling Riggs spoke with Dustin Stanley, Financial Planning Advisor of Strategic Wealth Designers.
“Many times people think, well it’s (financial assets) already fallen I’m just gonna lock in a loss if I move it now. And if you moved it to cash and just sat it in the bank you would be absolutely right. However, if you sell low in one area and buy low in another area that you can ride up as the market goes up, it a smart thing to consider right now,” Stanley said.
According to Stanley, there are areas in retirement accounts a person should avoid changing. Stanley claimed it’s a bad idea to lower contributions to a 401K retirement account or an IRA. “People are thinking, ‘I don’t want to put money into that account if it’s just going to keep falling,’ but you want to do just the opposite of that. When the market is at a discount level you want to go in and increase your contributions because you are buying when the market is on sale,” he said.
Time in the market is always better than timing the market according to Stanley. When Sterling Riggs asked Dustin, “Is now the time to buy?”, he responded “It depends on where you are in life, if you are 20 to 30 years from retirement, then absolutely. Don’t even think about the volatility that we are seeing. It kind of works as a good thing for you,” Stanley said. “If you are 10 years or less from retiring, then you’re going to want to look at reallocating or repositioning your investments to match what your goals in life are as you get close to retirement.”
To learn more about this financial topic and all market updates visit WDRB’s Financial Tips.
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