An advisor can help you with this decision.
Ric Edelman is a co-founder of Edelman Financial Engines. The following is taken from his weekly radio call-in show in 2018.
Question: Your comments about keeping emotions out of investing during an election year came a little too late for us. We’re ashamed to admit that we are among those who made changes to their portfolios based on concerns and fears about the candidates. We pulled about two-thirds of our assets out of the stock market. Could you give me some advice on how and when to get back in?
Ric: Your situation illustrates why investors should work with a fee-based financial advisor. When you’re saying, “This is awful! This is terrible! I’m in a panic. Get me out!” your advisor can say, “Let’s talk about this. Let’s think it through.” He or she can provide the handholding you need — at the very moment you need it — to prevent you from doing the wrong thing at the wrong time for the wrong reason.
Advisors can serve as a valuable sounding board, helping you think twice before you make an investment decision that may not be in your best interest. I believe there’s value in that. So, if you don’t think you can keep your emotions in check, you might consider getting professional help.
Now you know why I have a personal trainer. I know I’m capable of working out, but I also know that I won’t. So, my trainer drags me out of bed, sits me down at the weights and says, “Lift.” And so, I do. And he makes sure my technique is correct, so I don’t injure myself. Thus, I get could get better results with a trainer than I would on my own — even though I’m using the same set of weights available to me either way. A financial advisor can help you in the same way.
My advice would be to put the money back into the stock market right now. Assuming your original portfolio was suitable for you and your situation, you need to stick with that long-term plan. That might be emotionally difficult for you, but the money you lost by getting out is simply the price you pay for the education you just received.