I think we need a time machine right now, like the one that was in the old TV series with James Darren, The Time Tunnel. After all, the two characters, Tony and Doug become participants in past events such as the sinking of the Titanic, the attack on Pearl Harbor, the eruption of Krakatoa, Custer's Last Stand, and the Battle of the Alamo among others.
And if you recall, the moment anything bad was going to happen to them, what happened? They were whisked away to another place and time! Has it crossed your mind that you’d like to do that too?
I think if I could go back in time, it would be to southern California in the 1950’s. In case you’re curious, I am a big Perry Mason fan of the original series and when I see how things looked back then, I think that might be a cool place to go experience!
But the current reality is that the first six weeks of 2020, rewarded stock market investors with an all-time high as the Dow Jones Industrial Average reached nearly 29,6001 – and then in the blink of an eye, the bottom literally dropped out.
As fears rose about the pandemic – and its effect on worldwide business going forward – the stock market fell more than 30% in less than one month’s time.2 This, in turn, put many investors’ retirement dreams at risk.
Those who moved into “safer” financial alternatives like bonds and CDs didn’t fare much better, as interest rates dropped to a historical low beyond that seen during the recession of 2008.3 But, while continuing to keep ourselves physically safe is still a top priority, so is helping to ensure that your retirement plan remains on track.
With so many changes happening in our “new world” now, what worked yesterday in terms of a successful retirement plan may not fare so well for us going forward. But the good news is that there are still some viable strategies you can implement, based on your risk tolerance, time frame until retirement, and your overall short and long term financial and income objectives.
Due to the COVID-19 outbreak, there may also be some withdrawal, income, and tax-related programs via the CARES Act that you can take advantage of in your retirement planning.
And it couldn’t hurt to take some advice from the 4th richest man in the world…Warren Buffet, who has two rules about investing:
Rule #1: Never lose money
Rule #2: Never forget rule number one4
What he meant by that was when it comes to your investments, “losses hurt more than gains help,” and it takes a lot more to recover from a significant loss.
Buffett always understood that if you want to make money, you start by not losing what you already have!
Sage advice because the road ahead for investors and retirees alike may still be a bit rocky, as the world tries to figure out how to move forward.
So, planning cautiously, albeit optimistically, will likely require working closely with a retirement income specialist who can help you to prepare for future bumps in the road, as well as helping guide you in creating a strategy for generating a stream of income in retirement – regardless of any future market fluctuations.
To wrap up, seeing some normalcy to a degree (in the market), know there’s plenty of other things you can put your mind on right now and your money doesn’t have to be one of them!
If you’d like to have a conversation, go to my online calendar here and select a time that works for you for a 15-minute phone consult.
Have a great rest of the week and a great weekend.
Best always to YOU!
Artie
Source #1: https://www.investopedia.com/ask/answers/100214/what-dow-jones-industrial-average-djia-alltime-high.asp#
Source #2: https://www.cnbc.com/2020/03/23/this-was-the-fastest-30percent-stock-market-decline-ever.html?utm_source=morning_brew.
Source #3: https://www.thebalance.com/stock-market-crash-of-2008-3305535#:~:text=Thestockmarketcrasof2008occuredonSept.,largestpointdropinhistory.
Source #4: https://www.brainyquote.com/quotes/warren_buffett_149683