What To Do In a Market Downturn

Everyone is telling you to do nothing. But maybe you are nervous about the market, about coronavirus. You feel like you should do something. Anything.

Ok, here are nine things you can do over these next two pivotal weeks.

1.       Do not open your retirement accounts. I have not. Not one peek. Not one look. If you are invested in a target date fund, then please, do not open it. It is taking care of everything that needs to be taken care of. If you are invested in individual funds in your retirement, and you feel like you can’t sit idly by, then go rebalance your portfolio. Look for a place that says, “rebalance” and select that option. Then shut your computer, put on your tennis shoes, and go for a walk. Breathe in the fresh air.

2.       Increase saving a little right now. This is the time where spending isn’t super fun anyway, so consider increasing your retirement percentage. Go from 10%-12%. Or 15%-17%. You get to put more money into a market when stocks are on sale, and if you never back down your savings rate, then you might be setting yourself up for retiring a little earlier.

3.       Invest in a side hustle, not stock in a toilet paper company. Please don’t buy individual shares of companies that make toilet paper or videoconferencing technology. By the time you buy it, you will have bought the most expensive thing in the market that will likely go down when everything else goes back up. Instead consider some better advice. I met a man last week who said that his wealth was built over the last two major market downturns when he took on extra shifts at his job to make more money to put into the stock market. No side hustle? Throw on your tennis shoes and go for a walk.

4.       Ladies, this is your moment. You have been sitting in cash for years as it piles, brooding over a market that left you behind. Then in a couple weeks, the market drops a little, a lot, and then a lot more. It might drop a whole lot more. We cannot know. You can’t afford to wait for perfect timing because the market plays tricks with your brain. Just put the cash in.

5.       Stick with your plan. You are getting paid to endure this downturn. Remember, the stock market doesn’t reward you with a higher return than a bank interest rate for nothing. It expects you to stick with it thick and thin. It’s the people who bail when things get tough who lose. Whenever someone tells me that 08/09 killed their money, I know one thing immediately. They sold. Anyone else that was invested in the broad market reaped unbelievable rewards after the market recovered. Maybe an interest rate sounds good to you. Fine, but be prepared to double your savings rate. Yep, that’s right. Double. If you are saving 10% for retirement, then you would have to change that to 20% if you want to retire one day, getting only interest from a savings account.

6.       Change out your playlist to something happy. This is not the time for REM and Coldplay.

7.       Take on a home project. Professional organizer, Megan Ludvinsky with About Space, recommends that you find a project that you had been thinking about tackling. For me, it’s my husband’s tool area of the garage and planting a garden. Clean out the attic, tidy up the house, get rid of the clutter.

8.       Do nothing. We are experiencing an adult time out. Emails are slowing down. Lunches are cancelled. Coffees are cancelled. School is cancelled (ugh). Consider that this might never happen in your life again. So get a good book, queue up the Netflix, play hide and seek with the kids and drink it in. And by drink it in, it can also be your favorite glass of vino.

9.       Wash your hands.