Despite market volatility, local retirement experts urge restraint

Ride it out.

That’s the general advice local financial advisers are giving those nearing retirement age who are watching stock markets around the world tumble after President Donald Trump announced sweeping tariffs.

With at least 60% of Americans, by some estimates, tied to the stock market through 401(k)s, IRAs or traditional pension plans, Thursday’s stock market dive has people close to retirement just as nervous as major investors.

On Thursday, the Nasdaq composite fell by about 6% and the S&P 500 by almost 5%. Many tech stocks fared far worse, with Apple declining by nearly 10%.

It comes after Trump’s Rose Garden ceremony on Wednesday unveiled tariff rates higher than many expected for trading partners including China, Japan and the European Union.

But riding it out doesn’t mean those close to retirement can’t make some tweaks to protect their retirement nest eggs.

The key to weathering the storm, according to Skylar Riddle, a financial adviser at Fort Pitt Capital Group in Pittsburgh, is to build a resilient retirement portfolio — a mix of investments in stocks, bonds and other markets — rather than pulling out of the game.

“The easiest thing to do is to panic and sell, but can we do the opposite of that? If we’re positioned well at the beginning, we can,” Riddle said.

Potential retirees should analyze their portfolios — often in the form of 401k plans — and perhaps make adjustments to best suit their financial goals, he said. But even especially volatile market periods are not necessarily cause for change to an already well-positioned plan.

Most retirement experts remind their clients that their portfolio has to be positioned to continue to provide the best returns well after retirement, not just in the years leading up to it. Making big changes in the face of a market downturn could hurt future returns.

For those seeking to retire soon, Riddle advises clients to have a few years’ worth of money entirely outside of stock or bond markets to make retirees “more immune” to changes.

Understanding the mix of investments in your retirement account and why they are there is a key factor, said Rod Diaz, a retirement plan manager at the Marshall location of HBKS Wealth Advisors. That mix, Diaz said, is like chocolate cake: Though there are many recipes to make it, there also is a set of advisable parameters to which a baker should stick.

The longtime retirement expert said he had two pieces of advice for those with anxiety about the market: Be sure you have the right portfolio for your goals, and then be patient.

“Now is a good time to make an adjustment if you’re wrong, if your mix is inaccurate to your particular needs,” Diaz said. “But if your mix is correct, then I say stay the course.”

The new double-digit tariffs have created uncertainty, which, Diaz said, is the stock market’s greatest enemy. But this “momentary” uncertainty, he said, comes after record market highs and two years of lofty returns.

Looking at the “long-term horizon,” HUB Retirement and Wealth Management Senior Vice President Charley Kennedy said it is better to weather the storm now than try to time a reinvestment later.

“Those who try to time the market have statistically been shown to underperform over time,” he said.

The Pittsburgh-based planner said investors very close to retirement age should generally enter a “preservation approach,” seeking to consolidate their earnings and opting for less-risky investments.

But for those with a little time, it is simply a matter of “tweaking” investments for the best returns rather than piling gold bars under the mattress, he said.

For David Root Jr., CEO and founder of Pittsburgh-based wealth management firm DBR & Co., the best thing to do often is nothing.

Though he said he understands the “extreme nervousness” resulting from the market decline, Root said the mass sell-off is “more than likely a one-off event.”

In a recent blog post on the market unease, he said downturns are “part of the game.” Instead of being able to jump in and out of the market at the right times, Root said, successful investing requires the stomach to tolerate rough events.

Thursday’s plummeting graphs seem to indicate a short-term scare among global investors, but it remains unclear what direction the new tariff policy will lead markets.

As for Root, he said he is playing the long game.

“A day like today is just literally a point on a graph. That’s all it is,” he said. “We set our sights downrange.”