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August 8, 2019

Barron's: Todd Morgan Quoted in "How Retirement Savers Can Navigate a Volatile Market"

"How Retirement Savers Can Navigate a Volatile Market" by Daisy Maxey, Barron's.

Investors shouldn’t be frozen, but they should be patient, says Todd Morgan, chairman and chief executive of Bel Air Investment Advisors in Los Angeles.

“So far, it’s a garden-variety type of correction. Every year, we get a 5% to 10% correction, and this one at its low was about 6%,” he says. While this may turn out to be a 10% correction, investors can’t pick bottoms, he says. Now is the time to “put your toes in and slowly buy great companies,” Morgan says.

Those in or near retirement needn’t panic over the decline, he says.

“Look at the alternatives with very low interest rates available. Earnings are satisfactory,” he says, and the stock market’s price-to-earnings ratio is around 16 times, not excessive compared with historical norms. “If you want to make a return on your investment, you’ve got to put part of your money into good, dividend-paying stocks. … So start nibbling at your favorite companies; do it gradually because we can’t pick a bottom and because a year from now, I believe the market could potentially be 10% higher than it is today.”

But it is important to make sure that your portfolio is diversified across asset classes and focused on the correct asset allocation, Morgan says.

Read the full article here.