Mar 29, 2021
In 2020, I had a handful of clients who sold some or all of their stocks and moved to bonds or cash after the stock market plunged historically in the spring of 2020.
A couple of these clients eventually got back on the saddle again, but often what I see is that when you sell, and lock in those losses it can take years to get back in. Just a casual look at the headlines would cause anyone in cash to be skittish about getting back into the stock market - last year’s election, new covid strains popping up, uncertainty about vaccine rollouts, and waiting for the next shoe to drop.
The hard part about getting back into the stock market after you sell is that it never feels like the right time. Nearly every time, you’re going to have to get back in the stock market before you really start to feel better. If you wait until the negative and scary headlines have stopped convincing you to stay in cash, you could be waiting for years to reinvest. All the while, you’ve abandoned your long-term investment strategy and guaranteeing yourself very low rates of return.
There’s a lot to deal with psychologically when you’ve sold your stock portfolio. Most people feel stupid about selling, and they’re convinced that as soon as they reinvest back into the stock market, it will crash. There’s a lot of guilt and shame and regret wrapped up in the decision to sell your stocks, and it can be paralyzing to reinvest.
The key is realizing that it doesn’t matter what decisions or mistakes you’ve made in the past. All that matters is how you move forward from here. In a lot of ways we can’t live our lives looking in the rearview mirror and wishing it were different. All you can do is look ahead through the windshield and make a wiser decision about where you go from here. So don’t let the remorse prolong the problem. You can’t think like that if you’re going to be a successful investor.
So this week on the One Minute Retirement Tip podcast I’m talking about what to do now if you sold your stocks in 2020. You’re sitting on the sidelines kicking yourself because you were convinced that the pandemic was going to wipe out millions of lives along with your portfolio.
Yet, here we are, a year later and the stock market is at it’s all time highs. So where do you go from here if you got spooked last year and sold all your stocks? Or even if you didn’t sell everything, but you’re underweight stocks and you know you need to increase what you have in stocks, I’ll lay out a strategy to help you get fully invested in this week’s podcast episodes.
That’s it for today. But before you go, I just want to say thank you so much for listening to the One Minute Retirement Tip Podcast! This podcast is aimed at helping you enjoy a meaningful and financially secure retirement. If you’re getting close to retirement or you recently retired, this podcast is for you.
I’m your host, Ashley Micciche, and each week, I take a retirement planning topic and I break that down into digestible daily doses of retirement wisdom, so in just a few minutes a day, you’ll be better equipped to live the retirement you envision.
I hope you’ll join me this week, and I look forward to spending a few minutes with you tomorrow!
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