Our daily roundup of retirement news your clients may be thinking about.
3 steps to protect your retirement portfolio against a wild market
In order to protect clients' retirement portfolios from wild swings in the investment market, advisors should help retirees understand the total value of their holdings, undertake an updated risk assessment of investments and rebalance any investments that could be leaning more towards stocks than bonds, according to this article from Time Money. Retirees re-assessing their portfolios should consider undertaking the suggested three-step process at the earliest possible time in order to limit any possible damage the unruly market could cause on their investments. --Time Money
Clients can use the correction to make money in company retirement plan
One of the ways to increase income for a company's retirement plan without raising its risk quotient is to purchase underperforming assets using part of the company's contributions during their low points and waiting for their cost to rise above the price they were bought for, according to this article in Forbes. With proper guidance from financial experts, this low-risk approach may just be the way towards financial growth for retirees. --Forbes
Dont freak out about 401(k) plans
Clients are advised against needlessly panicking and making sudden changes in their investment strategy when faced with negative short-term market movements. Investors who are over 40 years old and have reduced their stock holdings in favor of bonds or cash have nothing to worry as long as they stick to a long-term plan, according to MarketWatch. Younger clients who make regular retirement contributions are advised to stick to their investing strategies in the stock market. --MarketWatch
Behavioral finance: how you are fooling yourself
Investors should be careful of behavioral finance biases, such as the effect of lower finance anchors and the default bias, according to Forbes. Suggested price points, like for monthly contributions, should only serve as guides, not the sole basis of a decision. Any financial decision should be carefully deliberated and made in accordance to the needs and circumstances of the person, rather than based on default suggestions.--Forbes
5 steps to take in a meltdown
Market meltdowns, like what happened in China, is no reason for investors to panic and act impulsively, but rather a time to review their assets and long-term plan to see whether any investments need to be rebalanced. Clients should also rethink plans to sell stocks now, then repurchase it later and remember the median fair value estimates of stocks to avoid more losses. It is also important to check companies that are strong enough to last and even benefit from economic shocks which may trade at good discounts. --Morningstar
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