In response to recent market turbulence, financial advisors in Houston are guiding residents through a period of economic uncertainty with advice centered on strategy and composure. Over the past two weeks, significant fluctuations have characterized the stock market, notably affecting individuals approaching retirement. The Dow Jones Industrial Average notably closed at 40,525 on Monday, a decline of nearly 1,500 points since the beginning of the month. This downturn has led to noticeable decreases in the value of 401(k)s and other investments for many Houstonians.
President Donald Trump’s announcement of a 90-day pause on several proposed tariffs has somewhat alleviated immediate concerns, yet anxiety remains prevalent among investors. A recent survey conducted by Thrivent, a not-for-profit financial services organization based in Wisconsin, reveals that 57% of Houston respondents express concern about their ability to retire according to plan, though only 34% report actively saving for retirement. The survey included approximately 2,200 participants nationwide, with an oversample of nearly 1,000 from Houston.
Financial experts, including Tricia Preston, a vice president and senior financial consultant at Charles Schwab in Houston, caution against reactions driven by fear. Preston states, “Panic is never a strategy,” underscoring the importance of maintaining a level-headed approach to financial planning. Echoing this sentiment, Sofia Hernandez, a financial adviser with Thrivent, emphasizes the necessity of patience and avoiding emotional decision-making during volatile economic periods.
Both Preston and Hernandez highlight the value of collaborating with a financial professional to craft a personalized financial plan. Preston remarks, “You will be more successful in the future if you do that,” advocating for a proactive approach regardless of one’s income or investment complexity. Hernandez warns against relying solely on advice obtained from non-professional sources, particularly amidst the prevalence of financial tips on social media platforms like TikTok.
For individuals looking to fortify their financial resilience, Hernandez advises prioritizing the establishment of an emergency fund capable of covering three to six months of expenses. “Rain is coming for all of us. The difference is who is ready, and who is not,” she asserts, emphasizing the security and stress reduction such preparedness offers.
For those nearing retirement, Preston recommends maintaining a reserve of liquid assets sufficient to cover at least two years’ worth of expenses. “When you’re going into retirement, I always tell clients to have at least two years in cash and short-term investments,” she advises, to withstand market instability without undue concern.
Despite the difficulty of witnessing investment declines, Preston advises that current market conditions may present opportunities for long-term retirement savings. She maintains that historical trends demonstrate market recovery, even if it requires several years. “You need to make sure you are saving money when the market is down, because you’re buying shares, and those shares are going to go up and down, but compound interest works, it’s math, and it’ll grow over time,” Preston explains.
Hernandez adds that maintaining a long-term perspective is crucial, particularly for those close to retirement age. “It is very important to have a long-term approach and take actions in the present for creating a future,” she notes, reminding clients that decisions made today will shape their future financial security throughout retirement.