I don’t want to lose money! What do I do?

The market started this week with an up day Monday recovering from some of the losses last week, but as of writing this Tuesday, it is down again. I see continued volatility to come and no one is yet to know the full economic impacts of the coronavirus virus. The truth is whether now, a year from now or 5 years from now, we will have another bear market. Historically losses in a bear market have been an average of 30%, sometimes more.

As we move closer to retirement and beyond, losing money becomes a bigger concern for most people, you are not alone! Many of the retirees and those preparing to retire, tell us that they would rather give up a 10/20% gain than take a 10/20% loss. I believe this is hardwired into us. It stems from the fact that we know when we stop working, we will not be adding to our accounts, so the opportunity to make money back is lost. Plus, we may need to use those accounts for retirement income and losing money means possibly losing income.

There are a couple of things you can do to “protect” your retirement accounts from market losses. First, I would recommend using the colors of money as a guide to choose the right investment mix. There are three main goals we have when investing money, safety, liquidity, and growth. No magic investment meets all those goals completely. Yellow money is safe and liquid but provides very little growth. Red money is liquid (most of the time) and provides growth, but there is no safety. Green money sits in the middle with safety (principle protection), but it has limited liquidity at least early on and limited growth potential (but also not subject to market losses). Having the right mix of these colors of investments is one of the first things you can do to protect your accounts. We often refer to the rule of 100 which is simply subtracting your age from 100 and having that percent in red money and the rest in green, with a sliver in yellow, too much in yellow and you take another risk, that is purchasing power risk (not keeping up to inflation).

The next thing I would suggest is having a risk assessment done on your portfolio. This should be run by third-party investment research and analytics firm such as Morning Star. This report is more than a snapshot of your portfolio, it’s analysis the funds in your portfolio and can give you a probability of upside and downside return potential. Everyone in or nearing retirement should have an updated risk assessment done on a regular basis and especially now when we are at an all-time market high. Let this volatility be a reality check for you and be sure you are ready!


Michelle Bertram and Beverly Bertram are financial advisors living in Mineral Point WI and serving the surrounding communities. Michelle Bertram does financial planning for retirees along with business consulting. Beverly Bertram specializes in retirement planning and income planning for her clients. Michelle Bertram and Beverly Bertram are authors of the book, Creating You DREAM Retirement and creators of the DREAM Retirement Process. Serving Madison WI, Verona WI, Mount Horeb WI, Barneveld WI, Dodgeville WI, Dubuque IA, Platteville WI, Lancaster WI, Cuba City WI, Fennimore WI, Darlington WI, Monroe WI, Spring Green WI, Black Earth WI and beyond


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