The COVID-19 outbreak continues to pummel the stock market as today trading was temporarily halted after the Dow was down more than 2100 points. Tulane Professor of Finance Peter Ricchiuti says for those investors who have their money tied up in the market and are feeling uneasy, it is understandable to want to offload some of that stock.
“If you can’t sleep at night, if you are just going out of your mind, don’t sell it all, but begin to sell maybe some pieces off, if you are really that uncomfortable,” said Ricchiuti.
Ricchiutti says for older investors, investment allocation is important as most advisors would recommend decreasing the percentage of investment in volatile stocks as an investor gets older.
“The old adage has always been that in a retirement plan you should have 100 minus your age in stocks. As an adage, that works out well because little by little, as you get closer to retirement and needing the money, you have less and less in the stock market,” said Ricchiuti.
Ricchiuti says for younger investors, he’d be hesitant to recommend making any moves because of a built-in advantage.
“And that’s the fact that you have a number of years until retirement and over the long run, stocks outperform every other asset class, they are just really really volatile, so you have time to make it up,” said Ricchiuti.
