“The same retirees who want rates to go up have to be prepared for a little market pain to go with it,” Cox said. “This is going to benefit income-oriented investors. What we’re going through now is part of the process to get there.”
When it comes to your long-term investments, financial advisors generally will tell you not to let those market jitters steer you off course.
“We are biologically wired to react, to steer ourselves away from the danger,” said Michael Conway, CEO of Conway Wealth Group in Parsippany, New Jersey. “That’s one of the surest ways to destroy wealth for long-term planning.”
If you already have a long-term diversified portfolio with the right allocations, you are better off doing nothing, Conway said.
If you went to cash during the financial crisis in 2008, you would have missed an approximate 17,000 point gain in the Dow Jones industrial average over the past 10 years.
“Had someone reacted to their biological instincts and gone to cash, they would have missed out on what has gone on in the last decade,” Conway said.