Give the market time

How we can learn from the past to deal with the future? It has been only 12 years since the 2008 financial crisis. Massive monetary bailouts and unprecedented fiscal stimulus packages were needed to prop up financial systems worldwide, and we saw a rapid global economic downturn.

Combined with the

U.S. subprime crisis and the European debt crisis, stock markets worldwide were decimated in weeks. Many people are still feeling the scars of that breakdown — some, now wondering if we are to now go through it again!

Take heart if you are seeing your portfolio take a swan dive into retirement uncertainty.

We have seen the markets do this many times in the past, and it is important to remember that what goes down, always comes back up when you are looking at the stock market throughout history. From 2009 to 2019 the stock market quadrupled in value, and we may be able to take advantage of a possible déjà vu opportunity again today.

This pandemic truly is an unprecedented event and although we are currently seeing epic spikes in market volatility and a global stock market crash (again!), I can guarantee this will indeed change. We often need these catastrophic market events for sectors to break through new highs when they begin to rebuild, something that is certain to come again as evidenced from the many times we have seen this happen over the past 100 years.

Why not see this as a stock market “sale” event? Your adviser may call this a tactical asset allocation — using a unique event to purchase stock at an undervalued cost. Talk to your adviser and see if this is an opportunity you should perhaps take advantage of — and if you are already invested in the stock market, don’t sell. Hang in there, it will turn and go even higher than before. Just give it a little time.

Christine Ibbotson is author of Don’t Panic: How to Manage Your Finances and Financial Anxieties During and After the Coronavirus and How To Retire Debt Free & Wealthy.