By Brenden Melrose, CFP®, CIMA®, AIF®, Wealth Advisor

As the market fluctuates daily, we wanted to share some questions Halbert Hargrove has been receiving from clients in the hope that they can help the public at large. We understand that the feelings of alarm over economic uncertainties are contagious, but please stick with your financial plan. If you do not have a plan built, then now is the time to create one – if you need, we’re here to help.

What should I do with my 401k in this period of uncertainty? When the market goes down, I’m cringing. 

First, know that it’s part of our mental wiring to respond to extreme market periods like these with heightened anxiety and stress. From behavioral finance, we know losses feel about 2.5 times more upsetting than the resulting happiness would be from a similar gain.

  • If you’re years away from retirement, while this is not a fun ride, your extended timeline should allow you to weather the storm. Continue your contributions! Contributions invested during a down time in the markets go further – meaning what you save and invest now will serve to buy more of your investment arsenal to grow for the future.
  • If you’re closer to retirement, your portfolio experience (with, likely, a lower allocation to stocks) will probably be more muted compared to what you see on the news. If you’re in a Target Date Fund, that fund should have already been exchanging more aggressive investments for more conservative ones.

If you’re working with an advisor in preparation for retirement, you’ve probably already made allocation changes appropriate for your situation. Those decisions were likely made during calmer times when it was easier to plan rationally, and although it’s hard – trust that decision-making process.

I’m in distribution mode – what do I do now? Should I rethink my investments? Should I rethink my goals?

Before hitting the panic button, take a deep breath. Talk with your advisor to assess your situation. Your investment strategy and allocation probably already reflect your stage of life.

If you have liquid savings, they could help with expenses to avoid drawing from your portfolio right now. Temporarily cutting back on unnecessary expenses could also help. Chances are social distancing is already doing this for you – no more daily coffee routine, nights out, planned travel/vacations, etc. Now is a great time to revisit your budget. It may not be necessary to rethink your goals altogether, but maybe the timing of the more flexible goals should be re-evaluated.

How long will this market volatility continue?

Unfortunately, that remains uncertain, which of course, is contributing mightily to the volatility. Until there is a better handle on the COVID-19 pandemic and its impacts on global supply chains and the global economy, the volatility is likely to continue.

Is a recession looming?

The extent of economic slowdown from the COVID-19 pandemic remains to be seen. With self-quarantine and social distancing to slow its spread, there will be implications for the economy. Even if a slowdown occurs for two consecutive quarters – the definition of a recession – it doesn’t mean there couldn’t be a fairly quick recovery as the pendulum shifts back to pre-pandemic activity. There may even be pent-up demand (resulting in big spending – a nice boost to the economy) boomeranging from the social distancing, as people quickly try to regain “normalcy” in their lives.

What’s the right move regarding my portfolio?

Talk to your advisor. He or she understands this is a painful time and are there for you to lean on. Discuss the investment strategy you have in place – created during calmer, more rational times. Learn how diversifiers in a well-diversified portfolio work during periods like these to help shelter you from severe swings. In short, if you have a well-diversified portfolio that’s tailored to your needs and goals, hold fast – this too shall pass.

For more information or questions, please contact Halbert Hargrove at