{"id":4438,"date":"2025-03-16T23:24:52","date_gmt":"2025-03-17T03:24:52","guid":{"rendered":"https:\/\/sharewatch.com\/wp\/2025\/03\/16\/how-some-investors-are-protecting-their-money-amid-stock-market-woes\/"},"modified":"2025-03-16T23:24:52","modified_gmt":"2025-03-17T03:24:52","slug":"how-some-investors-are-protecting-their-money-amid-stock-market-woes","status":"publish","type":"post","link":"https:\/\/sharewatch.com\/wp\/2025\/03\/16\/how-some-investors-are-protecting-their-money-amid-stock-market-woes\/","title":{"rendered":"How Some Investors Are Protecting Their Money Amid Stock Market Woes"},"content":{"rendered":"
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After the dot-com bubble burst in the early 2000s, Lars Staack decided to play it safe and invest his retirement savings in S&P 500 index funds, which are diversified and carry lower risk than owning individual stocks.<\/p>\n

It was a strategy that brought him peace of mind for more than two decades \u2014 until President Trump was elected in November. As he reviewed Mr. Trump\u2019s comments in support of sweeping tariffs, Mr. Staack, 62, who retired two years ago, became increasingly uneasy about the savings he planned to use for the rest of his retirement.<\/p>\n

Those nerves about how Mr. Trump\u2019s economic policies might affect the stock market led him to start selling his index funds in January, moving them into bond and Treasury funds, which are seen as safe havens in times of volatility. About a third of his savings are still in stocks. The daily swings this past week, which included the market\u2019s worst single day in months, have made him consider moving even more of his assets into safer bonds, he said.<\/p>\n

\u201cI\u2019m fumbling about, trying to figure out what is going to be the best way to preserve my retirement savings from a volatile economy, and from upcoming inflation,\u201d Mr. Staack said.<\/p>\n<\/div>\n<\/aside>\n<\/div>\n

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Many financial advisers are reiterating their usual advice during moments of angst: Do nothing and stay the course, assuming your financial plan is diversified and aligned with your goals. But the tumultuous rounds of trading have jolted people like Mr. Staack, who has an immediate need for his investments. The way he sees it, stock market index funds are no longer safe for people close to or in retirement \u2014 people who intend to use their assets in the near future and do not have the luxury of time to wait for the market to reverse course.<\/p>\n

\u201cWhat Trump and Musk have done is unprecedented, so it seems like nothing is safe anymore,\u201d Mr. Staack said. He lives in Poway, Calif., outside San Diego, and was a Republican voter until 2016, when he started voting for Democrats.<\/p>\n

Over the past few weeks, Wall Street has become increasingly pessimistic about whipsawing policies from Washington. By Thursday, the S&P 500 index had tumbled 10.1 percent from a peak that it had reached less than one month before, a sell-off fueled by investors\u2019 fears that trade wars and mass layoffs of federal employees could prompt an economic slowdown. The S&P 500 correction underscored how the two-year-long bull market is running out of steam in the early days of the Trump administration.<\/p>\n

Policy and politics have been the key driver of concern among clients, financial advisers said. But not everyone is taking action. In fact, advisers at some of the biggest wealth management firms said their clients were, for the most part, sticking with their existing financial plans.<\/p>\n

Most of the roughly seven million investors on the Vanguard brokerage platform have \u201cstayed disciplined,\u201d in line with their behavior during market downturns in the past, said James Martielli, Vanguard\u2019s head of investment and trading services. On Monday, when Wall Street suffered its steepest decline of the year, only 2.5 percent of Vanguard\u2019s clients placed trades, and the majority of those trades were to buy equities, rather than sell them, Mr. Martielli said.<\/p>\n<\/div>\n<\/aside>\n<\/div>\n

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\u201cMost clients right now are a little bit dazed, but still relatively comfortable where they\u2019re at and where things are going,\u201d said Mark Mirsberger, the chief executive of Dana Investment Advisors, which manages about $8.5 billion for institutions and individuals.<\/p>\n

In conversations with clients, it is often retirees, and those closing in on retirement, who are paying the closest attention to the stock market and expressing nervousness, said Rob Williams, the managing director of financial planning and wealth management at Charles Schwab. The question, he said, is how they respond.<\/p>\n

For people closer to retirement, \u201ctaking some risk off the table\u201d might make sense, but when politics becomes a factor in decisions, which seems to be happening more, Mr. Williams said, he urges clients to stick to their plans and \u201cnot respond emotionally.\u201d<\/p>\n

Siegfried Lodwig is more than a decade into his retirement, and the recent volatility has not changed his mind about keeping about half of his savings in the stock market, managed by a financial services firm. He said he trusted that the market would bounce back, as it always had.<\/p>\n

Still, Mr. Lodwig, 80, said he planned to leave his estate to Amherst College, where years ago he received a scholarship. He said he had some concern about how much would be left for the school if the market continued to fall in the short term.<\/p>\n<\/div>\n<\/aside>\n<\/div>\n

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Andy Smith, the executive director of financial planning at Edelman Financial Engines, is cautioning his clients not to overreact to news headlines about Wall Street\u2019s jitters. Those with diversified portfolios and enough cash on hand for their short-term needs are able to calm their nerves with greater ease, he said.<\/p>\n

\u201cIn times of volatility, everybody gets uneasy,\u201d said Heather Knight, a national brokerage coach at Fidelity Investments. \u201cStay the course \u2014 that\u2019s the best way to weather through some of those periods of volatility.\u201d<\/p>\n

But for some Americans \u2014 especially those who anticipate needing access to their savings in the near future \u2014 the current economic unease feels different from market dips they have experienced in the past, prompting them to rethink their investments.<\/p>\n<\/div>\n<\/aside>\n<\/div>\n

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Praisely McNamara, a single mother whose 16-year-old son is a junior in high school, decided in February to withdraw half of her 401(k), the maximum amount she could, despite having to pay thousands in tax penalties to do so. Employed in health care sales, she is still contributing to a Vanguard index fund. But with mortgage and college tuition payments on the horizon, the economic instability spurred by Mr. Trump\u2019s policies was enough for her to feel that she needed cash on hand.<\/p>\n<\/div>\n<\/aside>\n<\/div>\n

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As someone without a stockpile of savings, Ms. McNamara, of Newington, Conn., said uncertainty about trade wars and the outlook for the U.S. job market had fueled her decision.<\/p>\n

\u201cThis is absolutely the first time that I have felt in any way like I\u2019m not secure in what I\u2019ve been told is the most secure way to prepare for retirement,\u201d said Ms. McNamara, 40, who voted for former Vice President Kamala Harris.<\/p>\n

The volatility has rattled even Americans who do not expect to use their savings in the near future.<\/p>\n<\/div>\n<\/aside>\n<\/div>\n

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Alison Greenlaw, 43, is still a couple of decades away from retiring. She and her husband bought their home in Bloomfield, Conn., a few years ago. (Ms. Greenlaw knows Ms. McNamara through a community organization.) Until three weeks ago, her 401(k) was in a Vanguard target date retirement fund, which had a pre-mixed blend of stocks and other holdings based on the assumption that she would retire around 2045.<\/p>\n<\/div>\n<\/aside>\n<\/div>\n

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But as economic concerns started to creep into the stock market in February, she decided to move all of her 401(k) savings into a Vanguard money market fund, which has lower-risk investments like government-backed securities.<\/p>\n

\u201cI know I won\u2019t make any money there, but I\u2019m not freaking out like everyone whose 401(k) is losing money every day,\u201d Ms. Greenlaw said. \u201cI\u2019m feeling glad that I did what I did,\u201d she added, pointing to the market\u2019s tariff-induced swings this past week.<\/p>\n

Ms. Greenlaw tried to make an informed decision by talking to people who work in finance and whose opinions she respects. Many of them advised her not to do anything. But she said she was not comfortable taking the traditional wait-and-see approach. She said she felt that the level of uncertainty in the United States right now was \u201cexistential.\u201d<\/p>\n

On Tuesday, Stephen Dinan, 55, whose children are 5 and 7 years old, moved their 529 college savings accounts from U.S. stocks and stock index funds into bonds and an international equities index fund. He also moved his 401(k), along with his wife\u2019s, into bonds.<\/p>\n

Mr. Trump\u2019s unpredictable and aggressive approach to policy has stoked Mr. Dinan\u2019s worries about instability in the stock market. A Democratic voter, he said he hoped to move his savings back into stocks when the economic outlook cleared, or when there was a change in administration down the line.<\/p>\n

Financial experts are \u201cfocused on things that are moving within the game as it\u2019s played,\u201d he said. \u201cBut they\u2019re not planning for if the board game itself is taken out from under.\u201d<\/p>\n<\/div>\n<\/aside>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

After the dot-com bubble burst in the early 2000s, Lars Staack decided to play it safe and invest his retirement savings in S&P 500 index funds, which are diversified and carry lower risk than owning individual stocks. It was a strategy that brought him peace of mind for more than two decades \u2014 until President […]<\/p>\n","protected":false},"author":1,"featured_media":4439,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"ocean_post_layout":"","ocean_both_sidebars_style":"","ocean_both_sidebars_content_width":0,"ocean_both_sidebars_sidebars_width":0,"ocean_sidebar":"","ocean_second_sidebar":"","ocean_disable_margins":"enable","ocean_add_body_class":"","ocean_shortcode_before_top_bar":"","ocean_shortcode_after_top_bar":"","ocean_shortcode_before_header":"","ocean_shortcode_after_header":"","ocean_has_shortcode":"","ocean_shortcode_after_title":"","ocean_shortcode_before_footer_widgets":"","ocean_shortcode_after_footer_widgets":"","ocean_shortcode_before_footer_bottom":"","ocean_shortcode_after_footer_bottom":"","ocean_display_top_bar":"default","ocean_display_header":"default","ocean_header_style":"","ocean_center_header_left_menu":"","ocean_custom_header_template":"","ocean_custom_logo":0,"ocean_custom_retina_logo":0,"ocean_custom_logo_max_width":0,"ocean_custom_logo_tablet_max_width":0,"ocean_custom_logo_mobile_max_width":0,"ocean_custom_logo_max_height":0,"ocean_custom_logo_tablet_max_height":0,"ocean_custom_logo_mobile_max_height":0,"ocean_header_custom_menu":"","ocean_menu_typo_font_family":"","ocean_menu_typo_font_subset":"","ocean_menu_typo_font_size":0,"ocean_menu_typo_font_size_tablet":0,"ocean_menu_typo_font_size_mobile":0,"ocean_menu_typo_font_size_unit":"px","ocean_menu_typo_font_weight":"","ocean_menu_typo_font_weight_tablet":"","ocean_menu_typo_font_weight_mobile":"","ocean_menu_typo_transform":"","ocean_menu_typo_transform_tablet":"","ocean_menu_typo_transform_mobile":"","ocean_menu_typo_line_height":0,"ocean_menu_typo_line_height_tablet":0,"ocean_menu_typo_line_height_mobile":0,"ocean_menu_typo_line_height_unit":"","ocean_menu_typo_spacing":0,"ocean_menu_typo_spacing_tablet":0,"ocean_menu_typo_spacing_mobile":0,"ocean_menu_typo_spacing_unit":"","ocean_menu_link_color":"","ocean_menu_link_color_hover":"","ocean_menu_link_color_active":"","ocean_menu_link_background":"","ocean_menu_link_hover_background":"","ocean_menu_link_active_background":"","ocean_menu_social_links_bg":"","ocean_menu_social_hover_links_bg":"","ocean_menu_social_links_color":"","ocean_menu_social_hover_links_color":"","ocean_disable_title":"default","ocean_disable_heading":"default","ocean_post_title":"","ocean_post_subheading":"","ocean_post_title_style":"","ocean_post_title_background_color":"","ocean_post_title_background":0,"ocean_post_title_bg_image_position":"","ocean_post_title_bg_image_attachment":"","ocean_post_title_bg_image_repeat":"","ocean_post_title_bg_image_size":"","ocean_post_title_height":0,"ocean_post_title_bg_overlay":0.5,"ocean_post_title_bg_overlay_color":"","ocean_disable_breadcrumbs":"default","ocean_breadcrumbs_color":"","ocean_breadcrumbs_separator_color":"","ocean_breadcrumbs_links_color":"","ocean_breadcrumbs_links_hover_color":"","ocean_display_footer_widgets":"default","ocean_display_footer_bottom":"default","ocean_custom_footer_template":"","ocean_post_oembed":"","ocean_post_self_hosted_media":"","ocean_post_video_embed":"","ocean_link_format":"","ocean_link_format_target":"self","ocean_quote_format":"","ocean_quote_format_link":"post","ocean_gallery_link_images":"on","ocean_gallery_id":[],"footnotes":""},"categories":[19,21],"tags":[],"class_list":["post-4438","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","category-market","entry","has-media"],"_links":{"self":[{"href":"https:\/\/sharewatch.com\/wp\/wp-json\/wp\/v2\/posts\/4438","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/sharewatch.com\/wp\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/sharewatch.com\/wp\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/sharewatch.com\/wp\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/sharewatch.com\/wp\/wp-json\/wp\/v2\/comments?post=4438"}],"version-history":[{"count":0,"href":"https:\/\/sharewatch.com\/wp\/wp-json\/wp\/v2\/posts\/4438\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/sharewatch.com\/wp\/wp-json\/wp\/v2\/media\/4439"}],"wp:attachment":[{"href":"https:\/\/sharewatch.com\/wp\/wp-json\/wp\/v2\/media?parent=4438"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/sharewatch.com\/wp\/wp-json\/wp\/v2\/categories?post=4438"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/sharewatch.com\/wp\/wp-json\/wp\/v2\/tags?post=4438"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}