Opinion: Holding Steady in Rough Seas: Thoughts on Weathering a Volatile Market

By now the chances are that those of you who have investment/retirement accounts have received your March statements or soon will.  If you’ve been paying even the slightest attention to news of the stock markets, you may be anxious thinking about what you consider to be your losses – especially if your holdings are in a retirement account.

The good news is that, unless you sold something for less than you paid for it, you haven’t actually taken a loss.  Yes, it’s alarming to see a drop in the value of your holdings, but markets recover.  For example, on Black Monday of 1987 the Dow dropped 22.6% – the largest one-day drop in its history. Less than two days later it had regained 57% of its value and two years later had surpassed it.

A saying on Wall Street:  “Markets are driven by greed and fear.”  We’re definitely now in a fear cycle.  Traditionally, some market pundits shake their heads and pronounce “this time it’s different.”  But it never is.  Right now, Trump’s stop-and-go tariffing moves are shaking the markets.  But this, too, shall pass.

Back to good news:  the income you receive from stock dividends and bond interest isn’t affected by market gyrations.  If you rely on withdrawing a certain amount from your retirement account on a regular basis, you will still be able to do that.

If you are over the age of 73 and your holdings are in a retirement account, you must take a Required Minimum Distribution each year.  You have the entire year to do this so, if you are short of cash, you have until the end of the year if you need to sell something in your account.

If you’re surprised at how uncomfortable you’re feeling, it may be time to rethink your risk tolerance.  Schedule a conversation with the person who handles your account and discuss the full array of savings and investment opportunities available to you.

This is a good time to reflect on the perennial push to privatize Social Security. Some people are thrilled with the prospect of making decisions about “their” money.  Unfortunately, it seems to be human nature to want to buy when you feel good about the markets and sell in a panic when you feel bad, guaranteeing that you’ll buy high and sell low – the perfect recipe for disaster.

Disclaimer:  Neither the author nor the Indy intends to offer any specific investment advice.

Christina Platt, retired after over 30 years as a Senior portfolio Manager at Morgan Stanley. She raised her two children in Amherst between 1970 and 1993 and then moved to Berkeley, California where she served on the Board of Mother Jones magazine for ten years.  Now back in town since 2012, she co-chairs the board of the Rosenberg Fund for Children.