It’s a Great Time to De-risk

Not everyone should stand pat with stocks when the market is volatile. [Morningstar](?utm_source=eloqua&utm_medium=email&utm_campaign=newsletter_improvingfinances&utm_content=56777&elqTrackId=344ce27f9eb74fe7ae6e8a80c99ad161&elq=ab13e6d1da2040e8875a26db527c52a4&elqaid=56777&elqat=1&elqCampaignId=28948&elqak=8AF556ED0BC2F896D2CAE43C9551BCED1D6631CC800253F4EC0412DCE769933E1E9E) [Improving Your Finances] Improving Your Finances with [Christine Benz]( [Christine Benz] About a week ago, the stock market experienced its biggest one-day selloff in two years, prompted by a weaker-than-expected jobs report and recessionary worries, among other factors. Stocks recovered as the week wore on, and if you’re like most investors, you probably shook off the downturn pretty quickly. You’ve no doubt heard multiple admonishments about the value of hanging on during periods of market weakness, and the downdraft was so short-lived that it probably didn’t prompt a lot of angst anyway. But my contrarian take is that some investors—specifically, people within five years of retirement or already retired—actually should consider using the recent market volatility as an impetus to sell stocks. In [my latest article]( I discussed some of the key benefits of doing so, including the fact that safe yields are still pretty attractive today. And [Jason Kephart recently wrote]( about how, during this recent bout of equity-market volatility, bond prices have jumped. In other words, bonds’ utility as equity diversifiers is alive and well. Elsewhere on the retirement front, [the redoubtable Ed Slott discussed what he thinks is one of the most pervasive myths in retirement planning]( that taxes will go down once you stop working. Taxes do indeed go down in some households, but for heavy savers—especially baby boomers and Gen Xers who have done most of their investing inside traditional tax-deferred accounts—taxes may well go up, especially when required minimum distributions commence. Ed discussed this and other key issues in the intersection of taxes and retirement planning in his [latest book](monarch_sidesheet_title?utm_source=eloqua&utm_medium=email&utm_campaign=newsletter_improvingfinances&utm_content=56777&elqTrackId=0a748797e7c9433685cdc0312d76d251&elq=ab13e6d1da2040e8875a26db527c52a4&elqaid=56777&elqat=1&elqCampaignId=28948&elqak=8AF54BC17CAE6550EC0E54F6E66561D764F731CC800253F4EC0412DCE769933E1E9E). I also appreciated [Amy Arnott’s recent look at the direction of volatility in the stock market](. It’s definitely up relative to recent history, but not at all extreme in the context of long-term market performance. Last but not least, I know that there are many dividend aficionados in Morningstar.com’s readership, so I want to call out [the interview that Dan Lefkovitz and I recently did with Daniel Peris](. Not only did he write a book about the history and future of dividend investing but he manages a dividend-focused mutual fund. I thought it was a worthwhile conversation and hope that you will, too. With warm regards, Christine Benz [Why Retirees and Investors Approaching Retirement Should Reduce Risk Today]( Cash flows for the next few years are hiding in plain sight. [Find Out Now]( Share: [facebook]( [twitter]( [linkedin]( ADVERTISEMENT [media]( [media] [Daniel Peris: The Case for Dividend Investing]( An investment historian and portfolio manager discusses the dividend debate and what the future may hold. [Listen Now]( [The 60/40 Portfolio: Bonds Are So Back]( High-quality bonds show their mettle during recent market volatility. [Read More]( [The Big Retirement Myth]( Tax and IRA expert Ed Slott says it’s a mistake to assume you’ll be in a lower tax bracket in retirement than when you were working. [Watch Now]( [Putting Recent Market Volatility in Perspective]( Stocks have been more jittery than usual, but volatility is to be expected. [Learn More]( [Risk Tolerance and Risk Capacity: Why the Difference Matters]( Aligning these concepts can help you make better portfolio decisions. [What You Need To Know]( Get Top Stock Picks and Market Insights Every Week on The Morning Filter. Every Monday morning, Susan Dziubinski sits down with Morningstar Chief U.S. markets strategist Dave Sekera to discuss what's on his radar, new Morningstar research, and stock picks or pans for the week ahead. [Watch Now.](morningstar/streams?utm_source=eloqua&utm_medium=email&utm_campaign=newsletter_improvingfinances&utm_content=56777) Stay connected: [twitter]( [facebook]( [linkedin]( [instagram]( [YouTube]( [Apple News]( [View online]( | [See all newsletters]( | [Share your feedback]( [Unsubscribe]( from this newsletter. Or update your [email preferences](. © 2024 Morningstar, Inc. All Rights Reserved. 22 W. Washington St. Chicago, IL 60602