Making Your Money Last

Bull Markets May Still Have Risks for Retirees

Record stock market or not, retirement may not be the time to take on excessive investment risks.

You can’t blame people for getting excited about an eight-year bull market.

They hear on the news about a record high … and another … and then another, and it gets their juices flowing. Even retirees who usually are careful with their assets get pumped; they figure they surely must be getting rich, so they ask to come in for a review.

When they learn they’re earning a solid but not-exactly-spectacular 6%, it’s a letdown. Why not 9% like the market, they ask. Why not more?


  • Because you are a retiree and I specialize in retirement planning, I tell them, so first and foremost, I am a risk manager. And when we first met and we talked about risk on a scale of one to 100, with the market at a 78, your comfort level came out at a 51. We built your portfolio based on that.
  • Because how would you feel if you went home one night, and the guy on the news said, “Uh oh, the market imploded today”? And when you called me, I told you that of course your portfolio, which was heavily invested in the market followed suit and your retirement goals may suffer.

While I am not a get-rich-quick adviser, and you may find some financial professionals who are going to tell you what you want to hear, my goal is to tell you what you need to know to help keep your hard-earned money safe.

It is my belief that an individual with a good heart, a good mind and an adviser who presents the facts – not a sales pitch – will make good decisions for himself and his family.

Most of the time.

Advisers often warn retirees about making knee-jerk moves based on fear. But you also can make mistakes based on optimism, greed or a false sense of security. And that’s what’s happening right now.

If you follow the market enough to know how well it’s doing, you also must know it isn’t always that way. We’ve had two scary bear markets in the past 20 years – from 2000 to 2002 and 2007 to 2009. Still, this second-longest bull market in history and its recent rush of record-setting returns has investors looking for – and expecting – more.

Seek out advice, not a sales pitch

It’s an adviser’s job to help their clients make financial decisions by giving them the whole story. I believe they should throw away the salesman hat and get the education hat on. They should be giving clients the whys and what-ifs instead of myths and misconceptions.

If your financial professional says, “We’re in this for the long run,” ask him, “How long is the long run?”

If he says, “Your portfolio is just fine; leave it alone,” ask him, “What’s your definition of fine?”

And if he tells you, “Don’t worry, if the market goes down, it always comes back,” ask him, “When will that happen, how old will I be, and when it comes back, will I be better or worse off than I was?”

It’s a positive sign if, after you go in for that review, you get back in the car and say to your spouse, “You know what? That made sense.”

And later, hopefully you can feel more confident in your financial future as your work toward your financial independence.

Kim Franke-Folstad contributed to this report.

Investment advisory services offered through AE Wealth Management, LLC (AEWM). AEWM and Roberts Wealth Management are not affiliated companies. Investing involves risk, including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Any references to protection benefits or lifetime income generally refer to fixed insurance products, never securities or investment products. Insurance and annuity product guarantees are backed by the financial strength and claims-paying ability of the issuing insurance company.

About the Author

Paul E. Roberts Jr.

Founder and Chief Investment Officer, Roberts Wealth Management

Paul E. Roberts Jr. is the founder and chief investment officer of Roberts Wealth Management. He has passed the Series 65 exam and has insurance licenses in Texas, Louisiana, Mississippi and Alabama. He spent 22 years as a practicing CPA, then founded Roberts Wealth Management, a firm that focuses on estate preservation and retirement planning. His primary areas of focus are retirement income planning, investment management, 401(k)/individual retirement account (IRA) guidance and asset protection.

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