Elyse Foster in Barron’s: Older Investors Are Seen as Patient. In Market Downturns, They’re Anything But.

Elyse Foster, CFP® of Harbor Wealth Management in Boulder, CO recently spoke with journalist Neal Templin about older investors reactions to market downturns.

August 15, 2020 –

Older people have a reputation for being less impulsive. But when it comes to their investments, people at or close to retirement often react more hastily to market downturns, according to financial advisors and researchers.

The urge of older investors to exit tumultuous markets is understandable. While younger workers know they won’t touch their 401(k) account for decades, many older investors are already drawing from them. But once money is pulled from a depleted portfolio, it may not be there when the market rebounds. Researchers call this sequence risk: when markets crater just as a retiree is beginning to spend savings. It’s a scary situation and can result in a more sparce retirement. Investors shouldn’t try to address sequence risk in the midst of a market crash. Instead they should plan for the next downturn, and allocate less money to stocks if they are worried.

See the full Barron’s article published August 15, 2020.

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