Financial advisors urge caution and planning as market drops

Wall Street’s three-day slide has many people worried about their retirement portfolios.

Financial advisors, though, say now is the time to stay the course and avoid knee-jerk reactions.

“If you have a good plan in a moment like this, you typically don’t need to change anything, but if you don’t have a plan, moments like this make you think ‘I should have a plan,’” Eric Hogarth, a senior advisor with Johnson Brunetti, said.

Hogarth and other advisors said their offices have been flooded with inquiries from clients since President Donald Trump announced a broad tariff plan last week.

That plan includes a 10% across-the-board tariff on all imported goods set to take effect Wednesday at midnight. The plan also includes escalating tariffs that vary by country.

Ridgeline Financial Planners Managing Partner Matt Carbray said he’s been giving clients the same advice as Hogarth: follow your plan.

But that doesn’t mean investors should do nothing. Instead, that plan should include how to respond if the market shifts.

“This is one of the most difficult aspects of being a long-term investor is you have to live through these types of periods,” Carbray said.

Experts said people approaching retirement should include safe investments in their portfolio, increasing the chances they’ll have cash available once they stop working.

Hogarth said those investors shouldn’t get overly cautious, though, because they still want a long-term plan that will pay off as they get older.

“You still need money 20 years from now so make good decisions, take a breath,” he said.

Younger investors, meanwhile, can take advantage of the down market by getting stocks at a lower price.

Carbray said investors who have cash available should look to buy, but should take a conservative approach when doing so.

“You don’t have to put all that money to work day one,” he said. “A good idea may be to gradually, over the next three to six months, to what we call dollar cost average those dollars into the market.”  

Hogarth also warned caution, noting few people will have the cash available to take such to buy aggressively.

He said people should also make sure they aren’t spending money on the market at the expense of more pressing needs, like high-interest debt.

“Don’t be spinning your wheels saving money if you’ve got a hole in the bottom of your bucket with debt,” Hogarth said.

Carbray said people worried about a recession could opt to invest their money in a high-interest savings account or short-term investments.

Those could also produce a modest return while ensuring people can access that cash in six months to a year.

People who make long-term investments, meanwhile, may have to sell that stock off if their financial situation gets worse.