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Navigating a down market in retirement
In this episode, we delve into the intricacies of market volatility, particularly how it impacts retirees and those nearing retirement. We discuss why market downturns, while unsettling, are normal and temporary. Key points include understanding the sequence of risk, the importance of having a solid retirement plan, and actionable steps to stay calm and make informed decisions during market corrections. Additionally, we emphasize the significance of maintaining appropriate asset allocation, consulting with advisors, and avoiding knee-jerk reactions based on media sensationalism. The episode aims to equip listeners with the knowledge to navigate financial turbulence and secure a prosperous retirement.
http://retirewithmartin.com/ <- Learn about working with us
www.planwellretirehappy.com
00:00 Understanding Market Volatility for Retirees
01:14 The Emotional Impact of Market Drops
02:01 Historical Market Corrections and Recessions
03:13 Handling Market Corrections: Strategies and Insights
03:51 The Importance of Context and Media Influence
07:47 Practical Steps During Market Downturns
09:08 Revisiting Retirement Income Strategy
09:47 Reviewing Asset Allocation and Advisor Consultation
11:53 Focus on What You Can Control
12:40 The Importance of Sticking to the Process
12:50 Understanding Market Volatility
13:09 What Not to Do During Market Volatility
14:15 The Value of Patience in Investing
14:47 Avoiding Emotional Decisions
16:12 The Role of a Solid Plan
17:58 Staying Calm and Patient
19:49 Final Thoughts and Recommendations
21:36 Podcast Conclusion and Disclaimers
Point 1: Market Corrections are Normal and Frequent
Average Frequency and Duration of Corrections:
Source: Fidelity Investments, “U.S. stock market corrections: A historical perspective,” February 2023.
Link: Fidelity Viewpoints
Point 2: Bear Markets Always End with a Recovery
Historical Bear Market Data (duration, depth, frequency):
Source: Schwab Center for Financial Research, "Bear Markets in Historical Perspective," November 2022.
Link: Schwab Insights
2008 Financial Crisis Recovery Example:
Source: CNBC Markets Report, "The stock market’s historic 11-year bull run came to an end—here’s how it compared," March 2020.
Link: CNBC
Point 3: Emotional Decisions Cost Investors
JPMorgan Asset Management Study (Impact of Missing the Best Days):
Source: JPMorgan Asset Management, “Guide to Retirement,” 2023 Edition.
Link: JPMorgan Guide to Retirement (slide 41)
COVID-19 Crash Example:
Source: Vanguard Insights, "How America invests 2022," June 2022.
Link: Vanguard
Point 4: Diversification and a Balanced Portfolio Reduce Volatility
Balanced Portfolio (60/40) Performance and Volatility Comparison:
Source: Vanguard, "The case for a balanced portfolio," April 2023.
Link: Vanguard Investor Insights
2022 Diversification Example:
Source: Morningstar Research, "How a Diversified Portfolio Helped Investors Survive 2022’s Bear Market," January 2023.
Link: Morningstar
Point 5: Time in the Market Beats Timing the Market
Dalbar Quantitative Analysis of Investor Behavior (QAIB):
Source: Dalbar’s "Quantitative Analysis of Investor Behavior (QAIB) Report," 2023 Edition.
Link: Dalbar QAIB Report
Historical Comparison (Dot-Com, 2008 Financial Crisis, COVID):
Source: Fidelity Investments, "Market timing can cost investors big," February 2023.
Link: Fidelity Viewpoints
Opinions expressed herein are solely those of Martin Wealth Solutions, unless otherwise specifically cited. Material presented is believed to be from reliable sources, but no representations are made by our firm as to another parties’ informational accuracy or completeness. Content provided herein is for informational purposes only and should not be used or construed as investment advice or a recommendation regarding the purchase or sale of any security. There is no guarantee that any statements, opinions or forecasts provided herein will prove to be correct. All information or ideas provided should be discussed in detail with an advisor, accountant or legal counsel prior to implementation. Past performance may not be indicative of future results. Indices are not available for direct investment. Any investor who attempts to mimic the performance of an index would incur fees and expenses which would reduce returns. Securities investing involves risk, including the potential for loss of principal. There is no assurance that any investment plan or strategy will be successful.
View all episodes
By Jim Martin & Casey Bibb
4.5
2222 ratings
In this episode, we delve into the intricacies of market volatility, particularly how it impacts retirees and those nearing retirement. We discuss why market downturns, while unsettling, are normal and temporary. Key points include understanding the sequence of risk, the importance of having a solid retirement plan, and actionable steps to stay calm and make informed decisions during market corrections. Additionally, we emphasize the significance of maintaining appropriate asset allocation, consulting with advisors, and avoiding knee-jerk reactions based on media sensationalism. The episode aims to equip listeners with the knowledge to navigate financial turbulence and secure a prosperous retirement.
http://retirewithmartin.com/ <- Learn about working with us
www.planwellretirehappy.com
00:00 Understanding Market Volatility for Retirees
01:14 The Emotional Impact of Market Drops
02:01 Historical Market Corrections and Recessions
03:13 Handling Market Corrections: Strategies and Insights
03:51 The Importance of Context and Media Influence
07:47 Practical Steps During Market Downturns
09:08 Revisiting Retirement Income Strategy
09:47 Reviewing Asset Allocation and Advisor Consultation
11:53 Focus on What You Can Control
12:40 The Importance of Sticking to the Process
12:50 Understanding Market Volatility
13:09 What Not to Do During Market Volatility
14:15 The Value of Patience in Investing
14:47 Avoiding Emotional Decisions
16:12 The Role of a Solid Plan
17:58 Staying Calm and Patient
19:49 Final Thoughts and Recommendations
21:36 Podcast Conclusion and Disclaimers
Point 1: Market Corrections are Normal and Frequent
Average Frequency and Duration of Corrections:
Source: Fidelity Investments, “U.S. stock market corrections: A historical perspective,” February 2023.
Link: Fidelity Viewpoints
Point 2: Bear Markets Always End with a Recovery
Historical Bear Market Data (duration, depth, frequency):
Source: Schwab Center for Financial Research, "Bear Markets in Historical Perspective," November 2022.
Link: Schwab Insights
2008 Financial Crisis Recovery Example:
Source: CNBC Markets Report, "The stock market’s historic 11-year bull run came to an end—here’s how it compared," March 2020.
Link: CNBC
Point 3: Emotional Decisions Cost Investors
JPMorgan Asset Management Study (Impact of Missing the Best Days):
Source: JPMorgan Asset Management, “Guide to Retirement,” 2023 Edition.
Link: JPMorgan Guide to Retirement (slide 41)
COVID-19 Crash Example:
Source: Vanguard Insights, "How America invests 2022," June 2022.
Link: Vanguard
Point 4: Diversification and a Balanced Portfolio Reduce Volatility
Balanced Portfolio (60/40) Performance and Volatility Comparison:
Source: Vanguard, "The case for a balanced portfolio," April 2023.
Link: Vanguard Investor Insights
2022 Diversification Example:
Source: Morningstar Research, "How a Diversified Portfolio Helped Investors Survive 2022’s Bear Market," January 2023.
Link: Morningstar
Point 5: Time in the Market Beats Timing the Market
Dalbar Quantitative Analysis of Investor Behavior (QAIB):
Source: Dalbar’s "Quantitative Analysis of Investor Behavior (QAIB) Report," 2023 Edition.
Link: Dalbar QAIB Report
Historical Comparison (Dot-Com, 2008 Financial Crisis, COVID):
Source: Fidelity Investments, "Market timing can cost investors big," February 2023.
Link: Fidelity Viewpoints
Opinions expressed herein are solely those of Martin Wealth Solutions, unless otherwise specifically cited. Material presented is believed to be from reliable sources, but no representations are made by our firm as to another parties’ informational accuracy or completeness. Content provided herein is for informational purposes only and should not be used or construed as investment advice or a recommendation regarding the purchase or sale of any security. There is no guarantee that any statements, opinions or forecasts provided herein will prove to be correct. All information or ideas provided should be discussed in detail with an advisor, accountant or legal counsel prior to implementation. Past performance may not be indicative of future results. Indices are not available for direct investment. Any investor who attempts to mimic the performance of an index would incur fees and expenses which would reduce returns. Securities investing involves risk, including the potential for loss of principal. There is no assurance that any investment plan or strategy will be successful.
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