TheStreet / Retirement Daily: Don’t Liquidate Your Stock Investments — A Recession- and Pandemic-Proof Investment Strategy
Many events in recent weeks and months have had significant economic impacts on individuals and the economy. COVID-19 and the stay-at-home orders that resulted from it has led to an increase in the unemployment rate. According to statistics from Trading Economies, the unemployment rate increased from 3.6% in January 2020 to 14.7% in April 2020.
At the end of the first quarter of 2020, the real GDP in the United States fell by 4.8%.
These factors also affected the stock market. The Dow Jones Industrial Average (DJIA), which began at 28,868.80 on January 2, 2020, fell to 18,591.93 on March 23, 2020.
On March 8, 2020, the DJIA fell more than 2,000 points, the most significant daily drop since the financial crisis of 2008. Eight days later, there was a daily drop of almost 3,000 points.
Because of the economic impacts of COVID-19, many people are considering liquidating their stocks and converting the funds to cash and bonds.
Is this a smart strategy? More specifically, for those of you who are preparing for retirement or are already retired, is it a wise strategy to liquidate your stock investments in light of the current circumstances?