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Steve Janachowski, a financial planner in Mill Valley, California, got a text from his aunt at midnight Wednesday. “Can you sell everything and put it in bonds or gold?” it read.
Janachowski, who manages her account, texted back: “No, don't do that."
"When people get older, they get scarcity conscious,” Janachowski says. “They always think they don't have enough, even when they do, and they have to realize this is a temporary situation."
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If you're retired, the biggest danger in a stock market downturn can be panic. Financial advisers say that the best thing to do now is take some time, think honestly about your tolerance for risk, and review your overall retirement plan. If you were happy with your portfolio two months ago, you probably will be again — although perhaps with a few tweaks.
No one knew it at the time, but the bull market in the Dow Jones industrial average ended on Feb. 12, when the blue-chip index closed at 29,551.42. The next day, the Dow began a slide that, as of March 11, registered a 20 percent loss. (Stocks fell even further on Thursday.) Other major stock indexes, such as the Standard & Poor's 500, are in bear-market territory, too, traditionally defined as a loss of 20 percent or more.
It's hard to stay calm, particularly in such a rapid market decline — the fastest 20 percent fall since World War II, according to Sam Stovall, chief investment officer for research firm CFRA. The spread of COVID-19, the disease caused by the novel coronavirus, makes it even harder to stay calm. But that's what experts recommend, because otherwise you could sell your stocks at the bottom of the market and lock in those losses.
If you're glued to your computer screen and watching the carnage, stop. Take a walk. Talk to your family. Pet the dog. “Take a deep breath,” says Gary Schatsky, a New York financial planner. “Take some time to evaluate your financial house.”
Financial planners take three things into consideration when evaluating a client's financial standing: risk tolerance, time and goals. You can, too.