Many retirees are feeling the anxiety and uncertainty that currently exists in the market. Wall Street experts have pronounced that “volatility” is the new norm. Is a correction underway? Are we in for another dive off a cliff like in 2008? The answer to these questions is — no one really knows. Contrary to all of the talking heads in the media, predicting the market is a fool’s errand. So, what do you do? Consider the following 3 simple steps.
During the last market melt-down of 2008 and 2009, many retirees and near retirees lost a large portion of their life savings because their accounts were over concentrated in investments such as preferred securities and financial sector stocks. Investment accounts were decimated simply because they were not diversified. Surprisingly, many investors are in the same position today. Review your holdings and guard against investing too much in any particular sector. Diversification is the key to surviving any downturn.
Talk to your financial advisor regularly. Every effort should be made to ensure your advisor fully understands your investment objective, level of risk comfort and your expectations. You have a right to fully understand all of your investments before you invest. Your financial advisor has a duty to ensure that each and every investment in your account is suitable for your situation. A regular dialogue with your advisor will do wonders for your portfolio.
Each time you talk to your advisor, document your discussion to avoid any misunderstanding. This can be a very simple and easy task. Send an email, fax a letter or simply jot down a note and mail it to your advisor. If you want to be heard loud and clear, send your message in written form.