With the stock market facing another day of uncertainty on Monday, many people are questioning how it will impact their retirement funds.
The recent sharp decline has raised concerns among workers about the state of their 401(k) accounts and long-term investments.
Shawn Defoe, founder and financial advisor with Integrity RIA, says he’s been receiving more calls from clients asking how to handle the volatile market.
“The drop that’s occurred this year is kind of alarming and startling to most people because of how fast it happened. It’s probably one of the fastest times in history where we dropped 10% in just a few days,” Defoe says.
Defoe acknowledges these concerns are reasonable but stresses that now is not the time to panic. He urges investors to take a more informed approach to the stock market.
“Sadly, what we find is that a lot of people must have some exposure to stocks. Our job is to hold their hand because every time the market has fallen in history, it has always recovered and reached new highs,” he says.
The stock market opened Monday with a decline in response to ongoing tariff wars between the U.S. and some of its biggest trading partners.
However, Defoe points out that this isn’t the first time markets have faced significant drops, citing the 2020 downturn caused by COVID-19.
“It’s all like a lesson in behavioral finance,” Defoe says. “When people are making money, they get excited about investing. When things go down, they get discouraged. The stock market is one of the few places where a sale happens, and people run for the door instead of buying the sale.”
If you’re concerned about your retirement, Defoe encourages speaking with a financial advisor. He also advises thinking long-term and reassessing your financial goals.
