CLEVELAND — We are in the center of the worst financial storm since 2008. To help guide us through these troubled waters, I spoke with NCA Financial Senior Financial Advisor Elizabeth Scheiderer about what our best practices should be to navigate this uncharted territory.
Elizabeth’s take-away message for long term investors is, "Hold the course, stay invested." She added, "Historically, we know that periods of major downturns are followed by periods of major upward movement in the marke. It pays to stay invested."
I asked Elizabeth about how we should approach our retirement accounts such as your 401(k), and her words were clear and concise
"If you don’t need to open your [retirement] account [to view your statement], don’t open it," she said. "When you look at your statement, it’s going to be hard. There really has not been a good place to hide [your money from this downturn]."
Elizabeth also shared great perspective to remember.
"Look at how many shares you owned in January…and the number of shares that you own today" she explained. "It’s likely the same number if you didn’t sell. You still own the same number of shares as you did before [the recent downturn], it’s just the pricing is drastically different."
If you’re losing sleep at night, you don’t feel good and you're struggling with your financial loses, as a last resort Elizabeth suggests looking at moving your money to bonds or cash, but again if you can, stay the long-haul in your current investments.
If you feel like you must move your money to something more stable and conservative, Elizabeth suggests, "Start by doing a little bit…if putting only 20% of your stock allocation into bonds or cash makes you feel better, do tha, don’t do 100%. Slowly make that change and figure out your comfort level."
Asked about advice for retirees in our current economic climate, she suggests, "If you don’t have the next 6-12 months of your income needs in cash, I’d start to get that ready. Whether you sell a portion of your bonds, or revisit your allocations, talk to an expert…so you have time to ride this through."
If you panicked and sold your investments, Elizabeth advises to make a plan a stick to it.
"I wouldn’t watch the market every day thinking whether today is going to be an up day or a down day," she said. "You’ll drive yourself crazy. Get a plan and stick to it!"
As a final thought, Elizabeth added, "Think long term…this may be one of the best buying opportunities that we’ve seen in a decade!"