, Newburyport, MA


February 7, 2012

Where did your investments spend the last three years?


"It is common for investors to respond to a severe market downturn by seeking to protect their remaining assets, often by moving them into instruments they view as extremely safe and conservative. While this reaction is understandable, it can have a very negative impact on an investor's future" retirement income.

The study found that by switching to all-cash portfolios, investors "have very little chance of reaching their retirement-income goals." The cost of panic may be unrecoverable. "Panicking will substantially exacerbate the negative effects" of a market downturn, "making a bad situation even worse. In fact, in some cases the extra years of work required" from going to cash are greater than those due to the market drop itself.

The implications of the findings of the actuarial study apply to panicking or going to cash following any precipitous drop in the market, not just the 2008 drop. The combined discipline of continued regular savings and portfolio diversification is key to reaching financial goals. Those nearing retirement can also add to their retirement income by working a little longer and saving even a little bit more in these times.

• • •

Donald E. Askey, a Certified Financial Planner professional and president of Provident Advisory Group, is a registered fee-only adviser, headquartered in Newburyport. For questions, visit

Text Only | Photo Reprints

Special Features
Port Pics
AP Video
Texas Scientists Study Ebola Virus Smartphone Powered Paper Plane Debuts at Airshow Southern Accent Reduction Class Cancelled in TN Raw: Deadly Landslide Hits Indian Village Obama Chides House GOP for Pursuing Lawsuit New Bill Aims to Curb Sexual Assault on Campus Russia Counts Cost of New US, EU Sanctions 3Doodler Bring 3-D Printing to Your Hand Six PA Cops Indicted for Robbing Drug Dealers Britain Testing Driverless Cars on Roadways Raw: Thousands Flocking to German Crop Circle At Least 20 Chikungunya Cases in New Jersey Raw: Obama Eats Ribs in Kansas City In Virginia, the Rise of a New Space Coast Raw: Otters Enjoy Water Slides at Japan Zoo NCAA Settles Head-injury Suit, Will Change Rules Raw: Amphibious Landing Practice in Hawaii Raw: Weapons Fire Hits UN School in Gaza Raw: Rocket Launches Into Space With Cargo Ship Broken Water Main Floods UCLA