Stay the course.
CNN Business spoke with five top money managers to get advice about how to navigate these increasingly stormy market seas and find out how investors are managing during these choppy times.
All of them said now is a good time to reassess your goals and investing strategy — but not to panic and rush into bonds or cash. For most investors, especially younger ones, stocks will give you the best chance of solid returns over the long haul.
“Many people are saving for 30 years or more before they reach retirement age, and will see all kinds of market swings in that period — so it’s important not to make any changes based on short-term market events,’ said Fidelity spokesman Mike Shamrell in an email to CNN Business.
Shamrell added that the two most important things for investors to do now is make sure they have the right mix of stocks, bonds and other assets, and consider so-called target date funds that automatically rebalance your portfolios to shift to more conservative investments as you get closer to retirement age.
Keep calm and carry on works for investing too
“Near term market volatility could persist as the coronavirus outbreak will remain a concern in the coming months,” Kevin Collins, head of Retirement Plan Services at T. Rowe Price, wrote in an email to CNN Business. “While market shifts can be expected and the impact remains unclear, markets could stabilize if the outbreak of the virus appears to have eased.”
Call volume and desktop and mobile traffic to the T. Rowe Price web site have been higher than usual as of late, Collins added, but they were consistent with levels the firm has seen during other volatile periods for the market.
But that wasn’t the case for all financial advisers. Some were experiencing a much bigger increase in calls and emails from nervous investors.
“People are concerned. They don’t know what to do,” said Nathan Voris, managing director of business strategy for Schwab Retirement Plan Services. “But we’re quickly trying to pivot and get investors to focus on long-term savings strategies.”
He attributed the heightened levels of fear to the fact that this sell-off has happened much more rapidly than the big market slide in the fourth quarter of 2018 or even the 2008-2009 financial crisis. But Voris added that call volume is back to normal this week.
Mutual fund giant Vanguard also said that customers weren’t making abrupt moves. About 1% of its 30 million overall customers were actively trading last week, up from about 0.4% in a more typical week.
If you are young, time is on your side
Even fewer long-term investors were making moves. Trading in 401(k) plans accounted for just 0.3% of total volume at Vanguard last week.
“For the average investor we are advising them to tune out the noise and resist the temptation to make rash moves. Keep calm and stay the course,” said Carolyn Wegemann, a spokeswoman for Vanguard. “The majority of our clients are taking the long-term perspective.”
“Generally I would say that the recent reaction from clients is similar to other periods of market stress,” Grealish told CNN Business. “Most people are sticking to their plan and some have looked to use cash sitting on the sidelines to buy the dip.”