Well, it has finally happened! The stock market has taken that dreaded correction. So far this year, the S&P is down 15%, the Dow is down 11% and the Tech-heavy NASDAQ is down 24%.
I’m so glad to be focusing this month’s theme on growing and protecting your portfolio in a turbulent market, because this is the worst three month start for the market on record.
Since last fall when we reached an all-time high in the stock market, I have been begging women to get with their advisor to evaluate their goals and to reduce their “risk” in their portfolios.
You see almost every woman I have met with during the last five years has been invested in almost ALL stock or stock mutual funds. This has been an ideal place to be since the 2009 Great Recession, but for women 60+, having too much “stock” in your retirement portfolio can jeopardize you plans. Let me explain. When you are planning your retirement portfolio, it’s not how much assets you possess that is important, it’s how much income you have or can create. As you know, assets or portfolios can be cut in half by a stock market crash. How could you ever financially recover from that when you are 60+?
Let’s first look at where we have been. The stock market has increased 583% – or 15% per year since the last big correction in 2009.
We have all enjoyed low interest rates and a great economy for the last few decades. Yet we knew it couldn’t go on forever. In fact, a perfect storm has been brewing this past year…
- Ongoing global pandemic
- Putin’s War on Ukraine
- China’s lockdown putting pressure on the global supply chain
- Trillions of stimulus dollars
- And runaway inflation
The Federal Reserve had no other choice but to raise interest rates, and this was the straw that broke the camel’s back. We are now watching the carnage as everyone adjusts.
You may have heard the saying, “Don’t fight the Fed.” Do you know what it means? It’s a mantra that suggests you should align your choices with the actions of the Federal Reserve, meaning you should invest aggressively when the rates are low, and conservatively when rates are high. When rates on Treasury bonds go up, this makes stocks more expensive. In addition, it becomes more expensive to borrow money, and all of this is creating a lot of fear in the stock market. Thus, the big sell off.
If you are wondering what to do, you are not alone. Many are asking themselves…
- Are we at the bottom? Should we buy the dip?
- Should we sell and raise cash?
- Could it go lower?
No one knows for sure, so the prudent choice has been to ride these things out and wait for the markets to settle down and recover.
You may also be concerned about how to create income that you can’t outlive, how much money you need so you don’t run out, when to take Social Security, and what happens if you need long-term care. These are the types of questions we will be addressing on Smart Women Talk this month!
I’m thrilled to have author, and award-winning podcaster, Linda Jones back to talk about investing. This month, she will be sharing her market outlook given where we are today. Linda is very optimistic about the markets. She will also be sharing why women are great investors.
Airbnb Super Host, Colleen Kilpatrick and I will discuss how to know when you can retire, when to take Social Security, and many ways to create ongoing income to fund your 3rd act!
I hope you can join us! Be sure to subscribe to our show and share our program with your friends. See you soon!
Katana Abbott, CFP®, is a Midlife Millionaire® Coach, founder of the Smart Women Companies, and the host Smart Women Talk with over a million subscribers. For over 30 years, Katana has shown women how to take charge of their life and finances and believes it’s never too early to plan for expected and unexpected events like retirement, encore careers, moving abroad, or preparing for long-term care. She has written several books, created a financial literacy course, and is a popular speaker. Katana has been honored by NAWBO as one of Detroit’s Top 10 Business Women, receiving the Breakthrough Award. To download her new retirement guide, Three Smart Strategies to Maximize Your Retirement Income visit www.katanaabbott.com