Don’t let fears of a big stock market decline derail your investments — SkimNews
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- Anita Bruinsma, a Toronto-based certified financial planner at Clarity Personal Finance, argues that fears of a stock market decline — fueled by AI bubble worries after a long bull run — should not derail a well-constructed investment plan built on time horizon and goals.
- A 2023 analysis by three finance professors found that portfolios of domestic and international stocks outperformed stock-bond mixes on four metrics, regardless of investor age, undercutting the traditional view that older investors need heavy fixed-income exposure.
- Yardeni Research data shows stock markets recover from downturns in a median of about 2.5 years, supporting the case for retirees to hold 2-3 years of cash equivalents while letting stock holdings ride out the decline.
- Bruinsma advises that medium-term spending needs (3-7 years) belong in bonds or GICs, and that asset allocation should change only when personal circumstances — such as serious illness, disability, or a property purchase — shift, not in response to market movements.
Why it matters: Investors tempted to time the market amid AI-bubble fears are ignoring data: markets recover in a median 2.5 years per Yardeni Research, and a 2023 professor analysis found all-stock portfolios beat blended mixes on four metrics at any age. Selling mid-decline means straying from a plan built around time horizon, not market mood.
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