I'm only about 6 years away from retirement, but financial advisers say the best thing I can do right now is keep investing as usual
- My husband and I have been investing together for more than two decades, and now that we're about six years from retirement we've been worried about the value of our investments.
- We've had many financial advisers over the years, through all sorts of market volatility, and their advice has always been to stay the course.
- We're going to keep adding to our IRAs every month as usual, despite the stock market drop caused by uncertainty around the coronavirus. But to stay calm, I won't be checking the balance of my investment accounts.
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One of the things I thought was sophisticated and sexy about my boyfriend, now husband, 22 years ago, was that he had a broker and invested in the stock market. I was 30 years old and had owned two different houses, but other than a residence, I had no other knowledge of investing.
I remember drinking coffee one morning and watching him maneuver the telephone cord around the room while he said, "I would like you to use that money to buy Intel." As he walked around the room in his button-down shirt and tie before he headed off to work, I fell a little more in love with all the things he knew about the world that I didn't.
That was over two decades ago, and we have been investing together in the stock market and planning our retirement ever since.
We weathered past economic storms with help from our advisers
We have seen some tough times. We had money in the market in 2008-2009 when the Dow dropped 50%. We have always taken the advice of financial advisers and diversified our portfolio, but back in 2009, we were much younger, and our investments were stock-heavy.
We took a big hit. The important thing is we didn't panic or base our investing on emotion. If we had done that, we would have lost a chunk of our money for good. As we all know, the stock market recovered and came roaring back from the lows of 2009.
Our advisers have changed a couple of times over the years, but all of them have had the same three pieces of advice for us: diversify your investments, know your risk tolerance, and invest long term, not for short term gain. (Many people make their living day trading in stocks, or even buying and selling frequently. We have known people who are successful with that strategy, but it takes a lot of research, more knowledge than my husband and I have about individual funds or companies, and a high degree of risk. We never adopted that style of investing). We have always taken the advice from our brokers to look at the long-term view.
This week, on March 16, we saw one of the worst point crashes in history (the Dow lost almost 3,000 points). I have watched the market every day for the past 10 years. A few hours after the bell rings and Wall Street closes each weekday, I receive a summary from our broker outlining how our funds, bonds, and stocks did that day. Monday, after the crash, was the first time in my memory that I didn't open that email. I said, "I'm not going to look at this again until after new cases of the novel coronavirus start to recede."
We're going to stay the course and keep investing
I'm not going to lie and say that the current numbers and volatility don't bother me (we have only half a dozen years left until retirement). Still, I will say I have seen this happen before and time, patience, and keeping our cool made the difference in recouping our losses.
We are going to continue to invest monthly in our IRAs, stop checking our investments daily, refuse to panic, concentrate on things we enjoy, and take our minds off the roller coaster that we currently see in the market.
"History repeats itself" is a cliché for a reason, and the reason is that it tends to be true. This is a good time to look at the history of the market. We are going to stay the course, and hope history repeats itself sooner rather than later.
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