The volatility in North American stock markets amid the COVID-19 pandemic has many investors nervous about their retirement plans.
Financial advisers told Global News there are definitely a lot of people concerned as the weeks and months drag on.
“We know there is fear out there,” said Trent Hamans, the managing director of wealth transfer at ATB Wealth.
Hamans said it’s important not to panic because that can lead to rash decisions, as witnessed on the markets in the past couple of months.
“There was such a dramatic decline in a rather short period of time,” he pointed out. “But what we also saw is about half of the losses recovered in the last few weeks. So if you got out at the bottom, you really missed the opportunity to participate in the growth.”
Canadians play it safe
Retired Calgary teacher Edward Marchand cashed out some of his stocks when things got bad. The veteran investor said his portfolio has taken quite the hit, at least for him.
“I’m probably down 20 per cent to 25 per cent,” he said. “Something like that may not sound like that much, but it is a lot when you look at it as your retirement savings.”
Marchand said luckily there isn’t too much to spend money on these days with retailers and restaurants virtually shut down, but he’s still not rushing back into investing.
“It’s wise to be careful with your money now, because the future — it’s so much harder to see these days.”
Hamans said that is true, but it’s also important to remember retirement isn’t a destination, rather a journey, and the stock market is a long game.
“I think when we talk about panic and you talk about fear, it’s in the moment,” he said. “So again, looking at the long term is really the important element. The stock market is not meant to be something that you invest in in the short term.”
Marchand agreed but said that advice is best heeded perhaps by younger investors.
“When you’re my age, in your 70s, to buy and hold is not such good advice anymore,” he said. “Because how much longer can I hold?”
What should you do if you’re worried about your retirement portfolio?
Experts told Global News the No. 1 thing to do is connect with an adviser, a professional who can help you create a retirement plan and vision unique to you.
Then ask yourself some tough questions.
“What does retirement look like for you? What does that purpose look like for you? What does that journey look like for you?” Hamans said. “And secondly, have a look at what you have today and basically prepare a balance sheet.”
Hamans added that until you have laid it all out, don’t make any rash decisions, especially ones based on fear.
“Great decisions aren’t made when fear is the ingredient.”
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