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The value of financial advice during volatile markets

Working with an advisor can help you prepare for down markets — and stay grounded when they come


NO MATTER HOW DILIGENT YOU ARE about saving and planning, it’s normal to feel out of control during bouts of volatility. You may wonder, “Will I still be able to meet all my financial goals? Should I have let my retirement portfolio ride so high on equities when the market was up? What can I do now?”


Historically, markets have bounced back from downturns. And yet, when markets get unpredictable, even the most seasoned investors might find themselves doubting that basic investing tenet. “Difficult markets often lead to emotional decisions that might not be in your financial best interest,” says Marci McGregor, head of CIO Portfolio Strategy in the Chief Investment Office for Merrill and Bank of America Private Bank. “That’s human nature.”


Marci McGregor headshot

“Difficult markets often lead to emotional decisions that might not be in your financial best interest. That’s human nature.”

— Marci McGregor, head of CIO Portfolio Strategy in the Chief Investment Office for Merrill and Bank of America Private Bank

At times like these, a financial advisor can help you keep perspective and suggest some small steps you might take to rebalance and help protect your accounts. They might even be able to offer suggestions on investments you could consider making while the markets were down.


An informed and empathetic sounding board

It’s during times like these that an advisor’s calm and informed guidance can be most helpful. An advisor can help you create a long-term strategy for pursuing your goals — one that aligns with your risk tolerance, liquidity needs and time horizons, and that includes diversification so that your losses in a downturn might be minimized. You will likely still have questions when volatility hits. But an advisor should be able to provide useful historical perspective and timely advice and guidance.


Below are a few questions that may be top of mind for you whenever the markets dip, plus some insights on how working with an advisor could benefit you, depending on where you are on your road to retirement.





How should I handle market drops? Your advisor could reassure you that you have years ahead to recover from any losses in the accounts you’ve created for retirement and other long-term goals. But they should also review your short-term goals and discuss whether any adjustments need to be made to help keep you on track. They should walk you through all your choices as well as the fees and expenses involved, taking into consideration current market conditions and how much time you have to pursue those goals — things like saving for your children’s college, purchasing a home or covering caregiving costs for your parents. And they should help you consider whether you need to rebalance your investments to align more closely with your original asset allocation. If volatility causes you to realize that you’re not as comfortable with risk as you thought you were, your advisor can work with you to make adjustments that may help to further reduce the losses you might be experiencing.


Are there opportunities for me to grow my assets? One of the biggest opportunities may come from maintaining your equity positions. Abandoning equities when the markets are down puts you at risk of missing a recovery, says McGregor. In addition to giving you that important historical perspective, your advisor will have access to the latest market research and may suggest new investment choices that may be in your best interest and take advantage of lower stock prices.


Nearing Retirement


Should I adjust my asset allocation? If you’re close to retirement, you may be tempted to get out of stocks. “But a too-conservative portfolio can be risky, too,” says McGregor. An advisor can show you how adjusting your asset allocation could affect your portfolio over time and help you to plan for upcoming expenses, such as the rising cost of healthcare. “In some cases, as you approach retirement, you may even want to increase risk on a calculated basis,” says Chris Hyzy, Chief Investment Officer for Merrill and Bank of America Private Bank. You might consider shifting some of your fixed income to equities, for instance, if fixed income is offering low yields, as well as looking at dividend-paying investments.1


An advisor can help you create a long-term strategy for pursuing your goals — one that includes diversification so that your losses in a downturn might be minimized.

Will I need to make some trade-offs? Depending on the extent of the volatility and its impact on your portfolio, you may have to consider working a little longer or putting off another goal, acknowledges Ben Storey, director, Retirement Research & Insights at Bank of America. “But an advisor can help you find other ways to adjust. You might talk about putting off the purchase of a second home, for instance, so that you can still retire when you want to.”

Already retired


Do I have enough cash on hand? Plummeting markets can be especially nerve-racking if you’re relying on funds from your retirement accounts to cover living expenses. “Your advisor can help you revisit your budget to see which nonnecessities you can trim to free up income,” Storey says. If you do need more cash for a large expense or to pay down high-interest debt, your advisor might suggest working with a bank to consider low-cost borrowing options so that you don’t have to withdraw assets in a down market.


How can I protect my savings? In addition to working with you to evaluate and possibly adjust your asset allocation to help minimize losses and provide a potential income stream, your advisor can keep you up to date on rule changes. For instance, the SECURE 2.0 Act of 2022 has changed the age at which people must begin taking required minimum distributions (RMDs) from an IRA or workplace retirement plan account from age 72 to age 73 for those born between 1951 and 1959 and to age 75 for those born in 1960 or later.2


Preparing for the next downturn

As concerned as you might be about your finances when volatility starts, you can feel more assured by working with an advisor to help prepare to weather downturns when they hit. An advisor can help you make smart decisions by guiding you in establishing, reviewing and adjusting your investments to match your changing needs and life circumstances. It’s an ongoing process, but one that can make you feel more confident whenever downturns occur in the future.


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Corporations may determine to not pay dividends based on market circumstances.

If you are still working past the required age to start withdrawing, you may not have to take annual RMDs from your employer’s qualified retirement plan accounts until the year you retire if your employer’s qualified retirement plan allows it unless you own more than 5% of the employer’s stock.


Important Disclosures


Opinions are as of 03/06/2024 and are subject to change.


Bank of America, Merrill and their affiliates do not provide legal, tax or accounting advice. You should consult your legal and/or tax advisors before making any financial decisions.


Investing involves risk including possible loss of principal. Past performance is no guarantee of future results.


This information should not be construed as investment advice and is subject to change. It is provided for informational purposes only and is not intended to be either a specific offer by Bank of America, Merrill or any affiliate to sell or provide, or a specific invitation for a consumer to apply for, any particular retail financial product or service that may be available.


The Chief Investment Office (CIO) provides thought leadership on wealth management, investment strategy and global markets; portfolio management solutions; due diligence; and solutions oversight and data analytics. CIO viewpoints are developed for Bank of America Private Bank, a division of Bank of America, N.A., (“Bank of America”) and Merrill Lynch, Pierce, Fenner & Smith Incorporated (“MLPF&S” or “Merrill”), a registered broker-dealer, registered investment adviser and a wholly owned subsidiary of Bank of America Corporation (“BofA Corp.”).


Bank of America is a marketing name for the Retirement Services business of BofA Corp.


Asset allocation, diversification and rebalancing do not ensure a profit or protect against loss in declining markets.


Investments have varying degrees of risk. Some of the risks involved with equity securities include the possibility that the value of the stocks may fluctuate in response to events specific to the companies or markets, as well as economic, political or social events in the U.S. or abroad. Bonds are subject to interest rate, inflation and credit risks. Investing in fixed-income securities may involve certain risks, including the credit quality of individual issuers, possible prepayments, market or economic developments and yields and share price fluctuations due to changes in interest rates. When interest rates go up, bond prices typically drop, and vice versa.

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