New York (CNN Business)Stocks plunged last week and have given investors motion sickness in the past few days with their gut-wrenching ups and downs. But if you’re a long-term investor, what should you do with a 401(k), IRA or 529 savings plan for your kids’ college tuition?
Stay the course.
CNN Business spoke with five top money managers to get advice about how to navigate these increasingly stormy market seas and find out how investors are managing during these choppy times.
All of them said now is a good time to reassess your goals and investing strategy — but not to panic and rush into bonds or cash. For most investors, especially younger ones, stocks will give you the best chance of solid returns over the long haul.
“Many people are saving for 30 years or more before they reach retirement age, and will see all kinds of market swings in that period — so it’s important not to make any changes based on short-term market events,’ said Fidelity spokesman Mike Shamrell in an email to CNN Business.
Shamrell added that the two most important things for investors to do now is make sure they have the right mix of stocks, bonds and other assets, and consider so-called target date funds that automatically rebalance your portfolios to shift to more conservative investments as you get closer to retirement age.
It may come as a pleasant surprise to hear that many investors have actually been sitting tight despite the massive market volatility. T. Rowe Price ( said that 99% of its 401(k) clients made no changes to their retirement portfolios during the week of February 24 — when stocks suffered their )worst five-day performance since the 2008 financial crisis. The firm didn’t have data yet for this week.
“Near term market volatility could persist as the coronavirus outbreak will remain a concern in the coming months,” Kevin Collins, head of Retirement Plan Services at T. Rowe Price, wrote in an email to CNN Business. “While market shifts can be expected and the impact remains unclear, markets could stabilize if the outbreak of the virus appears to have eased.”
Call volume and desktop and mobile traffic to the T. Rowe Price web site have been higher than usual as of late, Collins added, but they were consistent with levels the firm has seen during other volatile periods for the market.