How to Protect Your Investments in a Volatile Stock Market, According to Financial Planners – NBC Chicago
Shares closed in the red on Friday, marking the fifth consecutive week of losses on Wall Street.
Many of those approaching retirement keep a watchful eye, wondering what to do next.
“I’m close to retirement, I’m watching this very closely, it’s scary to see him down 5-6%,” one Michigan Avenue investor told NBC 5.
Another resident had a similar view of the market, citing the war in Ukraine, high gas prices and inflation as factors in the decline.
“Everything is uncertain, everything is upside down, the world is upside down, it’s on a roller coaster,” he said.
Financial advisors say they’ve seen situations like this before, and the best bet right now is to hold steady and keep planning for the future.
“The stock market is actually a fantastic opportunity for most people, the stock market is the one thing people don’t want to buy on sale,” said Carla Nitz, a certified financial planner.
Nitz has nearly 30 years of experience, weathering historic lows, a pandemic sell-off, and a recession. She thinks that slippages like the one seen on Wall Street are opportunities to get a cheaper price.
Bill Blyth, the founder of Blyth and Associates Financial Services, believes a nest egg continues to be essential in times like these. But he doesn’t want you to store all your money.
With inflation at 8.5%, he says keeping an eye on the value of money is essential when deciding what to do with it.
“You need cash, that’s fine, but holding cash for 30 years guarantees you’ll have the same amount of cash, and things will cost a lot more in 30 years,” Blyth said.
Although both financial advisers believe that now is the right time to capitalize on a volatile market, some people may struggle more than others.
Some Americans use their 401k to keep their heads above water.
Blyth and Nitz think this should be your last resort, and if you’re near that point, a meeting with a financial advisor may be in order.
“If you take money out of a 401k and you’re under 59½, not only do you have to pay taxes on it, but you can be hit with an additional 10% penalty,” Nitz said. .
This penalty could make all the difference because it’s money you’ll never use.
Instead, Nitz and Blyth advise meeting with an expert and considering a loan.
“A lot of people ready, shoot, aim, then ready, shoot, aim is expensive… come talk to someone like us, and we’ll look at the whole picture and say hey, here’s your best bet,” Blyth said. .