Ask Terry Questions Stock market losses — what to do?

Stock market losses — what to do?

By Terry Savage on March 08, 2020 | Investments

Terry I am 68 years old and retired. I have lost almost $3000 in the market the last 4 days. I only have $70,000 invested but it’s all I have for my future. Should I move this money out of the markets. I am seriously panicking about losing more

Terry Says

I am answering this on Saturday night. For the past week the market broke about even, gaining just a bit after some volatile trading days. It is now down about 11% from its peak.
I am not terribly optimistic about the market in the coming months, as it digests the economic impact of supply chain disruptions, event cancellations, and a potential general economic slowdown. If you didn’t sleep well last week, you probably won’t sleep well in the coming weeks.
My advice, in the situation you describe, it to move at least half of your money into a money market mutual fund. Assuming your $70,000 is inside a retirement type account, this won’t trigger any taxes. But even if it is outside a retirement account, it might be better to pay taxes on gains than lament losses.
Of course I have no idea if the market will rebound to new highs in the coming months. Perhaps if a vaccine is created, or if the virus is not so deadly, there will be a resumption of economic activity soon. That’s why I recommended selling only HALF of your position. That way you’ll have enough liquidity for withdrawals if you need the cash — and some hope for the market in the future.



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