Experts at Ohio Deferred Compensation say to remain calm, focus on future
By Michael Pramik, Ohio Public Employees Retirement System
June 8, 2023 – They say not to panic if you feel like you’re losing control while in the water. Keeping calm and floating along could be a life saver.
Similarly, trying to navigate your personal retirement savings in stormy financial waters can be a challenge. You may feel tempted to hastily alter your course as you seek to safeguard your assets. But acting too quickly could sink your attempt at reaching your retirement savings goals.
Here are five tips from the experts at Ohio Deferred Compensation on how to make it through the turbulent seas of a down investment market:
- Resist the urge to do “something” right away: Do not let market fluctuations alone make you change investments. Remember, bad years are generally balanced by good years.
- Stay calm through the ups and downs: Make sure you temper your expectations for growth. Your asset allocation should be based on return expectations needed to meet certain goals and objectives. If your portfolio includes stocks, down markets are already factored into your long-term return expectations.
- See the opportunity with market losses: By continuing to invest regularly during a down market, you will often be able to buy more of your chosen investments with the same amount of money as before. Riding out the down market so you can participate in the rebound should be the goal.
- Do not check your portfolio too often: Reviewing your allocations and making necessary changes periodically is smart, but checking too often may lead to hasty decisions that negatively impact your returns.
- Forget short-term losses in the past: Do not dwell on how much more your portfolio was worth at the time of its most-recent high. Unless you sell investments or withdraw funds, the “losses” are only on paper. Long-term investing historically leaves plenty of time for the market to recover. Of course, you should always keep in mind that investing involves risk, including the possible loss of principal.