My elderly mom called and wants to sell out of the market

[javajoe]

This is basically just a vent post.  My elderly mom called last night (I have power of attorney but she is still in great shape mentally and physically) and wants to sell out of the market.  She was a stay at home mom that got divorced late in life, so lives alone and essentially lives frugally on fixed income.  Getting killed by inflation.  Against my advice, she's basically been at 20/80 since '08, so you can imagine how much opportunity cost she's lost due to her risk tolerance.

Now she is looking at her Fido statements monthly and basically said she has no business being in the stock or bond market anymore.

<sigh>

-JavaJoe

[steelpony10]

javajoe ,

           If it helps I was in the same situation with my parents from 1982-2017. My instructions were to keep them even with their spending with no wiggle room to take more risk. To avoid your situation I made sure they had a separate checking account from their brokerage account. They only got one checking account statement per month and never really saw what happened with their investments as long as the monthly cash transfer and SS was deposited each month. That’s pretty much the same setup I employ with my wife. Of course I told her as a novice she’d just freak out even though it’s part of investing.

[win1177]

Sept 14, 2022 17:16:28 GMT javajoe said:

This is basically just a vent post.  My elderly mom called last night (I have power of attorney but she is still in great shape mentally and physically) and wants to sell out of the market.  She was a stay at home mom that got divorced late in life, so lives alone and essentially lives frugally on fixed income.  Getting killed by inflation.  Against my advice, she's basically been at 20/80 since '08, so you can imagine how much opportunity cost she's lost due to her risk tolerance.

Now she is looking at her Fido statements monthly and basically said she has no business being in the stock or bond market anymore.

<sigh>

-JavaJoe

Try to talk her out of “selling everything”. My elderly mother and stepfather were also really scared every time the market sold off, and I had trading authority over her account at Schwab. I had to repeatedly give them “pep talks” about the market rising OVER THE LONG TERM, and managed to grow her account to about 2 million by the time she passed. But every time we had a selloff, she would panic. 

Since she has a pretty conservative allocation at 20/80, I would just encourage her to “stay the course”. If anything, one would argue she needs to INCREASE her equity allocation now, but she won’t want to hear that!

Win

[Chahta]

If she is spending down to live it is a problem. Are her income needs being met? If so have her focus on the income and not worry about the principal. Hopefully she has profit still so maybe 3% treasuries for the 80% will fulfill her income requirements.

[chang]

Sept 14, 2022 17:16:28 GMT javajoe said:

Against my advice, she's basically been at 20/80 since '08, so you can imagine how much opportunity cost she's lost due to her risk tolerance.

Me, if I was at 20/80 the last 15 years, I wouldn't change a thing right now.

As an aside, stories like this are good news. Panic selling always indicates we are near a bottom (and quite possibly past the bottom).