Highs and Lows of a Fickle Market

The Market’s Wild Ride

The stock market's volatility this year has reached a level not seen since 2009. Big market swings can be particularly unnerving if you're near or in retirement—like retiree Gary Wilhoit of Mint Hill, North Carolina. Stocks make up about 60 percent of the 62-year-old's portfolio, and days of heavy losses caused him to second-guess his decision to retire in 2014. His uneasiness spread to his wife, Debra, a recently retired school librarian, until their adviser reminded them that the market goes up and down in cycles. "If you can maintain your calm when it's not as good, you will be glad you did when it cycles back," she says. Of course, no one knows where stocks are headed. But if you're unsettled by all the volatility, these tips may help.

Focus On Your Portfolio

"What you are reading in the headlines is not what is going on in your portfolio," says Stuart Ritter, a senior financial planner with T. Rowe Price. At this stage in life, you're likely not 100 percent invested in stocks, and your cash and bonds can temper big swings in the stock market.

Ignore the Headlines

Bear markets, along with their heart-pounding volatility, are just part of investing. "A great retirement lasts 30 years these days. That's about six bear markets," says Chris Mullis, chief executive of NorthStar Capital Advisors. "Don't be surprised or frightened by this."

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Create a Cash Cushion

Maintain enough cash to cover living expenses for two years, says Antwone Harris, a senior financial consultant at Charles Schwab. Any income from Social Security and pensions will reduce the amount of cash needed. This way, to pay bills, you won't have to sell stocks for a loss during a bear market

Don't Shun Equities

Stocks might be causing you indigestion now, but you will need their long-term potential growth to keep up with inflation and a life spanthat could last into your 90s, Ritter says. For those near retirement or in the early years of it, having 40 to 60 percent in stocks and the rest in bonds can provide growth and stability.

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