So way back in the beginning of March (feels like 3 years ago) I spoke with the kind folks at AARP. The conversation was about what investors — especially those close to retirement — should be doing with their money.
Its a killer line up: In addition to your humble narrator, the group included Abby Joseph Cohen ( GS), Mohamed El-Erian, (Allianz), Jane Bryant Quinn (financial journalist), Mellody Hobson, (Ariel Investments), Carrie Schwab-Pomerantz, (Charles Schwab Foundation), Ric Edelman, (Financial Engines) and Diane Swonk (Grant Thornton).
A quick sample:
Jill Schlesinger: What words of comfort do you have for people who are shell-shocked by the market’s decline?
Barry Ritholtz: I am fond of saying this is a feature, not a bug, of the stock market. Stocks go up and down regularly. Think back to what stocks did in 2008-09, 2000, 1987 and 1973-74. This is a cyclical phenomenon, just like expansions and bull markets. Look at this from a long-term perspective, and you see the same things coming around again and again.
Mellody Hobson: It could get worse before it gets better, but there’s no reason to believe the market won’t continue its long-term upward trajectory. There is no 20-year period — not one — when the stock market has lost money. That underscores taking a long-term view.
Ritholtz: You have to step out of the moment and think not in terms of minutes, days, weeks, but in terms of years, decades, a lifetime.
JS: What would you say to older people who think they need to pull their money from the stock market now and have it in cash?
Carrie Schwab-Pomerantz: People who panic and sell lock in their losses. In 2009 the Dow Jones Industrial Average dropped to 6,500 and today, even after the big declines in March, it’s around 20,000. People who held on to their stocks have actually performed pretty well, despite these recent big dips.
Ritholtz: Nobody who retired in 2005 said to themselves, Hey, remember that Monday when the market crashed in 1987? Thank goodness we sold.
Source: 8 Money Experts on How to Survive This Volatile Economy Some of the sharpest minds in the financial world break down what’s going on and how you can ride out this storm by Jill Schlesinger AARP, May 4, 2020 https://www.aarp.org/money/investing/info-2020/interview-with-8-financial-experts.html