The Market Has Changed. Most Portfolios Haven’t.
Most pre-retirees don’t realize how many decisions are still affecting their money — even when they think nothing is happening.
I had lunch recently with Marc Lieberman, one of the advisors in our Wealthramp network. Marc is a CFA — a Chartered Financial Analyst — which simply means he’s spent years studying how markets work and how decisions around risk play out in real people’s lives, not just on spreadsheets.
We weren’t even talking about the stock market at first. Just catching up. And then he said something that made me stop.
“Most pre-retirees don’t realize how many decisions are still affecting their money — even when they think nothing is happening.”
That stuck with me.
Because so many of the pre-retirees I talk to believe they’re invested in the simplest possible way: broad index funds, low fees, no second-guessing. Let the market work.
Imagine that’s you. You’re 62. You’ve done everything “right.” You saved consistently. You didn’t chase hot stocks or trends. You didn’t panic during downturns. Over time, you built a portfolio worth more than a million dollars, mostly invested in broad S&P 500 or total market funds at a place like Vanguard.
You don’t trade. You’re not trying to pick winning horses. You’re betting on the whole race — and for a long time, that worked very well.
But here’s the part many people haven’t revisited: “hands-off” doesn’t mean “nothing is happening.”
Even with an index fund, the index itself changes over time as companies are added, removed, or reshuffled. When a stock like Nvidia grows to represent a much bigger share of the S&P 500, your exposure to it increases automatically — without you doing anything.
When you chose a broad index strategy years ago, you made one big decision upfront: I’m going to stay fully invested, no matter what. You committed through good markets and bad ones.
That made perfect sense when retirement felt far away.
What’s changed isn’t your index fund. What’s changed is the market around it.
Markets move faster now. They react more sharply to news, fear, and momentum. A growing share of day-to-day market moves comes from investors and strategies that adjust quickly. You may not invest that way — but your index fund owns the same stocks they trade.
And that matters more as retirement gets closer.
Your index fund doesn’t slow down when markets feel expensive. It doesn’t reduce risk because you may soon need income. It doesn’t know when you plan to retire or how flexible you really are if the market drops.
It just stays invested.
That isn’t wrong or right. But it does present a choice.
As Marc put it, investing in a broad index fund doesn’t eliminate decisions — it means you made one big decision upfront, and then stopped adjusting unless you step in.
Here’s why that matters when you’re five years from retirement — or closer.
At that point, market swings aren’t just numbers on a statement. Timing matters. A sharp drop a year or two before you plan to stop working can affect how confident you feel, how flexible your plans are, and how long you’re willing to wait for a recovery.
Your index fund doesn’t know any of that. It doesn’t know when withdrawals will begin. It doesn’t know that a downturn now feels very different than one did twenty years ago.
It just stays invested.
So is “stay put” still a valid approach? Absolutely. But staying fully invested works best now when it’s paired with awareness.
This is also where it can be smart to talk with an advisor — not to change everything, and not to chase something new — but to pressure-test your thinking.
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I hear this all the time from readers who want to ask questions like:
What does staying fully invested mean for me over the next five years and beyond?
How would a sharp market drop realistically affect my retirement plans?
What would tell me that my comfort level has changed?
For a long time, investors were told the smartest thing they could do was stop thinking about their investments altogether.
At some point — especially when retirement is no longer abstract — being thoughtful again isn’t panic or second-guessing.
It’s paying attention.
Warmly,
Pam