Investors should stop fearing temporary selloffs and embrace them as buying opportunities, according to financial planners.
“Don’t try to wing it, but be thoughtful about investing,” said Dina Isola, investment adviser at Ritholtz Wealth Management, referring to preparations for a market downturn. “Think about what assets you own and why you own them.”
She said downturns are “a blessing if you are young, and terrifying if you are old. So, planning cannot be ‘one-size-fits-all.”
For younger investors, downturns can present an opportunity to load up on stocks at lower prices, though many lack the courage to do so.
Of course, age is a factor in laying out any long-term investment plan.
“Older people who are nearing their retirement should have a nice cushion in their portfolios, which is either in cash or short-term bonds that can be used for withdrawals. The cushion will allow them to withdraw safely without being forced to sell assets, whose value temporarily dropped,” said Isola.