Ep 206: How Your Portfolio Can Weather The Coronavirus Storm, With Fidelity’s Jeanne Thompson
What a year this month has been... Starting on March 9th, we watched as the Dow began a series of record-setting point drops. Then on March 11th, the World Health Organization announced what many of us probably already suspected — that COVID-19 was officially a pandemic. The market volatility that we have seen the last few days has understandably left many of us on edge, and according to a new survey from Fidelity, 70% of people are either somewhat concerned or very concerned about how the market is impacting their retirement. But there is good news. Even though emotions are running high right now, people seem to be staying focused on their long-term goals. Through March 15th, 96% of Fidelity customers had not made changes to their 401(k) accounts since the beginning of the year.
To answer some of our more pressing questions during this time, Jean sat down with Jeanne Thompson, Senior Vice President of Fidelity Workplace Consulting. In her role, she works with employers around the country to deliver financial wellness and wellbeing programs to their employees. The pair dive into what we should do with our retirement contributions right now — do we continue to put money in, even during times of economic turmoil? What do we do if we find ourselves in dire straits due to a layoff or furlough? They also discuss what it means to take hardship withdrawals from our retirement accounts, 401(k) loans, and other options for liquidity, including tapping into a home equity line of credit, and zero interest credit cards.
They also discuss rebalancing and analyzing the investment mix in our portfolios right now. The “right” answer depends almost entirely on your age, and how far away you are from retirement. Jeanne breaks things down for folks in their 20s, 40s, 50s, 60s and beyond. Perhaps most importantly, she recommends rebalancing things slowly if you’re going to do it, since the market is changing day-to-day. Jeanne also offers up important thoughts on how we can all manage our stress during these times.
Then, in Mailbag, Jean and Kathryn tackle a question about prioritizing a student loan vs. investing in the stock market. They also dive into a question from a 63-year-old woman who recently saw her account balances drop and is wondering if now is a good time to rebalance. Lastly, they hear from a listener who is wondering if she should prioritize putting money into her 401(k) or her savings account, given the recent market turmoil.
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