Retirees – the group that relies most on a thinly-stretched financial advice industry – are in a difficult position. They are worried about their financial positions but aren't sure what to do.
Dr Roger Cohen, a senior investment specialist at BetaShares, argues that people close to retirement and retirees should both stay invested despite the wild volatility in the markets lest they make a decision that could leave them significantly worse-off over the next few years.
"This is where rational and irrational behaviours can have a significant impact on the financial wellbeing of retirees," he said. "The decisions they make during this unprecedented event could make or break their retirement plans.
"It may leave some effectively 'retirement trapped' by their irrational decision making."
Cohen acknowledged that riding out the market swings that we've been experiencing will test the resolve of even seasoned investors.
"A panic reaction will cause many to sell at the bottom or on a bounce. They will not benefit from a subsequent recovery. While others may rebalance their portfolios (which generally sees reweighting into growth assets) too soon or too late," he said.
"For pre-retirees and those early in the retirement phase, staying invested through this period of extraordinarily high volatility will be critical if they are looking to benefit from the eventual economic recovery," said Cohen.
What can advisers and super specialists say to scared investors?
"Those with externally-managed assets need to trust their investment manager or financial adviser, and not look at the performance day-to-day," said Cohen. "The wild swings in equity markets over March have resulted in many people selling at a bottom and making difficult decisions in an unprecedented environment."
Looking at your balance has become an exercise in pain no matter what your situation, but if you're relying on that money, it's can inspire understandable panic. "I would suggest [retirees] look back at the GFC and ask themselves the question – what should I have done then?
"If the answer is, 'if only I had remained invested or had made different choices,' take heed," said Cohen. "We will come out the other side of this. Base your decisions on that, rather than on the moment."