Experts advise patience amid market swings
Should you sell now?
Selling your stocks or moving your 401(k) investments away from stocks and into bonds may offer less chance of seeing huge drops. However, getting out of the market also would mean having to figure out the right time to get back in, unless you’re willing to give up any future recovery and gains.
Timing the market correctly is always difficult. Some of the best days in the U.S. stock market’s history were clustered in among downturns.
Some recoveries take longer than others, but experts often recommend not putting money into stocks that you can’t afford to lose for several — up to 10 — years. Emergency funds, for things like home repairs or medical bills, should not be invested in stocks.
If you’re new to investing
Apps on smartphones made trading easier and cheaper than ever. That’s helped draw in a new generation of investors who may not be used to such wild swings in the market.
The good news is younger investors often have the gift of time. With decades to go until retirement, they can afford to ride the waves and let their stock portfolios hopefully recover before compounding and eventually growing even bigger. For them, drops in prices may almost be like stocks going on sale.
If you’re near retirement
Older investors have less time than younger ones for their investments to bounce back.
People who already retired may want to cut back on spending and withdrawals after sharp market downturns, because bigger withdrawals will remove more potential compounding ability in the future. Even in retirement, some people will need their investments to last 30 years or more.
