We Exited the Stock Market the Day Before the Pandemic Was Declared
How we knew to sell, why we think it was smart, and what you can do now.

On March 10, we advised our clients at Retirement Planners of America to get out of all equities. On March 11, the World Health Organization (WHO) officially declared the COVID-19 outbreak a global pandemic. How did we know the announcement that triggered an economic fallout like we have not seen since the Great Depression would come that day, and weeks before states issued stay-at-home orders?
As our name suggests, we work primarily with people who are retired or retiring soon. Our two primary goals for our clients are to make sure their money lasts as long as they do, and to provide them with financial peace of mind. We believe that protecting principal is key to both of those goals, so we employ a strategy that utilizes a mathematical formula to tell us when the stock market is trending downward. When that strategy, which we call “Invest and Protect,” reached its sell signal in March, we sold equities. (I counseled listeners of my radio show to get out of equities as well.) This is the same strategy that sounded the alarm in November 2007, and we remained out of the stock market through all of 2008 and half of 2009.
Do we believe we made the right move? Absolutely. In our view, those in or near retirement may not have the time to withstand large losses. They may not be able to wait years for the stock market to come back, especially if they are living on their investments now. And we don’t believe we’ve seen the bottom of this market. We’ve only seen a glimpse of how it will ultimately react, in our view, because of the economic conditions this pandemic has created. The Great Depression, the Y2K Bear Market and the Great Recession all experienced rallies before precipitous drops. We think this market could be on a similar trajectory, especially given our high unemployment numbers, unprecedented debt and the uncertainty about the future. Will businesses reopen? Will people still have jobs? Will consumers still want to spend money? It’s difficult to know because we’ve never had this type of hard stop to the economy.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Since the stock market began falling prior to March 10, our clients did experience some losses, but their retirement savings are now in government money market funds, among the safest shelters we could find. We believe that getting out of the stock market when we did help provide protection from what could be even bigger losses. Our clients who got out of the stock market in 2007 never had to recover from the large losses resulting from the 57% drop in the S&P 500 index that left so many reeling — and the negative financial impact that still affects many Americans.
If you want to protect your retirement savings from this volatile market, I suggest you:
Determine how much money you need to retire
Take the time to figure out exactly how much you’ll need to sustain your standard of living in retirement. Then ask yourself how much you can lose before your retirement is at risk.
Employ an exit strategy
Once you know how much money you need for retirement, protect that amount, even if it means selling. Establish an objective point when you would need to get out of the market. If you reach that point, act.
Don’t depend on a buy-and-hold strategy
Holding onto stocks through a bad market may have worked when you were younger, but do you really have the time to wait for the stock market to rebound when you are close to retirement or already retired? After the bear market of 2007-2009, the stock market didn’t reach its previous high until almost six years later. In August 1929, the Dow was at 380: After dropping 86% it didn’t hit 380 again for 25 years. The Japanese stock market, the Nikkei, peaked in 1989 — and has never fully recovered.
Don't let the tax tail wag the investment dog
I’ve heard people say that capital gains taxes keep them from selling. I’ve also heard sad-but-true stories about money lost because investors didn’t want to pay taxes. In my opinion, too many investors are willing to take big risks of losing their principal — all because they don’t want to pay taxes on capital gains.
Change your game plan to defense
All of the recommendations above become easier if you understand that because you are no longer young, you don’t have many wage-earning years ahead (maybe none if you are already retired). You no longer have time to wait for the stock market to come back. You’ll need to live on your investments sooner rather than later. At Retirement Planners of America we believe that once you’re retired or close to retirement, it’s time to put protection of principal ahead of growth.
All expressions of opinion reflect the judgment of the author, Ken Moraif, as of the date of publication and are subject to change. Ken Moraif is a controlling owner and investment adviser representative of MMWKM Advisors, LLC, doing business as Retirement Planners of America (“RPOA”), which is an SEC registered investment adviser. Registration as an investment adviser is not an endorsement by securities regulators and does not imply that ROPA has attained a certain level of skill, training, or ability. Statements such as and similar to: “we told our clients to be out of the market in 2007 and 2008,” “we told our clients to get back into the market in 2009,” and “clients that followed our advice were out of the market in 2008,” refer to recommendations collectively made by RPOA’s principals while employed at Eagle Strategies, LLC., and also at Cambridge Investment Research Advisors, Inc. Four of the five principals remain as principals today. These statements refer to an “invest and protect” strategy” which RPOA has been using since its inception in 2011. Therefore, any references to RPOA’s performance or its investment advisory recommendations predating 2011 generally refer to recommendations made by RPOA’s principals at the respective other firms described above.
Readers of this article should not rely on the content as the sole basis for any investment decisions. A professional adviser should be consulted and/or independent due diligence should be conducted before implementing any of the options directly or indirectly referenced. Past performance is not indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment or investment strategy will be profitable or equal any historical performance levels.
This article should not be construed as a solicitation to effect, or attempt to effect transactions in securities, or the rendering of personalized investment advice. Any target referenced in this article is not a prediction or projection of actual results and there can be no assurance that any target will be achieved RPOA makes no warranty, express or implied, for any decision taken by any party in reliance upon the information discussed.
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Ken Moraif is the CEO and founder of Retirement Planners of America (RPOA), a Dallas-based wealth management and investment firm with over $3.58 billion in assets under management and serving 6,635 households in 48 states (as of Dec. 31, 2023).
-
Monetizing a Hobby in Retirement: The Benefits and Pitfalls
Get extra cash in retirement to do what you love.
-
What You Should Know About Assisted Living
If you decide that an assisted-living community is right for you or your loved one, take these steps to make sure that its fees, services and quality of care fit your needs.
-
How One Widow Nearly Missed Out on $213,000 in Social Security
Losing your partner often means losing 30% to 50% of your household income. This financial adviser emphasizes that planning ahead and understanding the rules surrounding survivor benefits can help.
-
Simple Ways to Make Your Executor's Job Less of a Pain
Being an executor of an estate isn't easy, so you should do what you can to help them out. It can be as easy as making a list and being smart about your email accounts.
-
'Trump Accounts' for Newborns: A Great Idea That Could Be Better
According to this financial professional, limitations on the proposed $1,000 deposit at birth highlight shortcomings in our retirement landscape, but the potential is there to make a big difference.
-
Opportunity Zones Expert Sees Bright Future in 'Big, Beautiful Bill'
New legislation introduces rural "super incentives" and expanded access, though a potential investment freeze could stall billions in community development funding. Here's what every investor needs to know.
-
Sorry, But AI Alone Doesn't Cut It for Financial Planning
Artificial intelligence has its place in retirement planning — but only as a tool. It falls short in several key areas that require a human touch.
-
Five Divorce Settlement Blind Spots: An Expert's Guide to What You Can't Afford to Miss
Even the best lawyers can miss tax and other financial considerations when drafting complex divorce settlements, so specialist advice is vital from the outset.
-
Preparing for the Worst: Retirement During a Recession
If you're close to retirement and today's economic uncertainty has your stomach in knots, follow my parents' example. They made it through, and so can you.
-
Is a Robo-Adviser Right for You? The Pros and Cons
For many folks, robo advice can likely be fine. It's inexpensive and easy ... but also a little one-size-fits-all. More complex financial situations may need a human touch.