Strategies to Protect Yourself From a Market Correction

With retirees facing risk from market corrections, there are some strategies they can employ to protect their retirement portfolios.  Nicole Mayer, an RPG Life Transition Specialist, talks with Retirement News Today to discuss these strategies.

Mayer recommends rebalancing your portfolio, especially when the market is at an all-time high, as it is currently.  The risk that was initially taken when investing in your portfolio, is probably not the same as it was in years prior, as the market has gone up.  You want to go back to the "same risk allocation that you set out to take when you initially set up that portfolio," Mayer says.

Nicole Mayer  RPG Life  Source:

Nicole Mayer

RPG Life


People often want to get more aggressive and that's one of the biggest mistakes Mayer sees.  Instead, she advises having a cohesive risk-management strategy to always be prepared for a downturn.  

Mayer says that people like to "time the market," and get emotionally involved and she finds that more often than not, people do the exact opposite of what they're supposed to do.  You're supposed to sell high and buy low but when the market corrects itself, they end up selling low.  "If you take your emotions off the table, you're probably going to be in better shape in the long run," advises Mayer.

Knowing when to get out and know when you've had enough is another important strategy Mayer recommends.  As the market is high today, decide that if the market is going to fall, what level it will be when you need to get out.  Mayer says to not "protect that nickel on the upside," but rather protect the downside.  

When approaching retirement, it's important to rebalance your portfolio to manage the risk and to know what kind of risk you're taking.  Even more important than rebalancing is knowing what kind of risk you're taking so that you're rebalancing into the risk level that you want, says Mayer.

Nicole Mayer is a Life Transition Specialist with RPG Life.  She spoke with Retirement News Today, providing online, retirement news video content.  Retirement News Today is a featured network of Sequence Media Group.

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