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Volatile Market Landscape: Why Retirees Are Questioning Temporary Exits

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  //stocks-investing.news-articles.net/content/202 .. hy-retirees-are-questioning-temporary-exits.html
  Published in Stocks and Investing on Tuesday, November 25th 2025 at 16:41 GMT by The Globe and Mail

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Should you exit the stock market at least temporarily? A concise review of the Globe & Mail article

The Globe & Mail’s recent commentary, “Should you exit the stock market at least temporarily?,” tackles a question that has become increasingly common among retirees and near‑retirees: is it wise to pull your money out of equities, at least for a while, when markets look shaky? The piece is a balanced, data‑driven exploration of the pros and cons, weaving together macro‑economic trends, behavioural finance, and practical tools that can help investors make an informed decision. Below is a comprehensive summary of the article’s key points, including the additional insights gathered from the linked resources that appear throughout.

1. The backdrop: a volatile market landscape

The article opens by setting the stage—highlighting that the past two years have been the most turbulent since the Great Depression. It notes that the S&P 500, after a meteoric rise in 2020‑21, fell roughly 35 % in 2022 and has remained erratic ever since. This volatility is tied to a confluence of factors: post‑pandemic supply‑chain bottlenecks, rising inflation, the Federal Reserve’s aggressive rate hikes, and geopolitical uncertainties (e.g., the Ukraine war).

The Globe & Mail article references a recent Morningstar analysis that shows the market has traded above 20‑year highs for much of the last year, but the risk‑adjusted returns have eroded. The narrative underscores the psychological discomfort many retirees feel when watching their equity portfolios swing dramatically.

2. Why retirees think about a “temporary exit”

The article cites several drivers behind the “exit” conversation:

• Risk aversion after the pandemic: The pandemic exposed many retirees to significant losses early in 2020. Even those who stayed invested found that a single‑year decline wiped out a sizable portion of their savings.

• “Re‑entry” anxiety: Past experiences of trying to time the market have made some investors wary of missing a recovery wave.

• Cash‑flow concerns: With the prospect of a long retirement, retirees often worry that a sudden drop could jeopardise their ability to meet basic living expenses.

• Behavioral biases: Loss aversion, status‑quo bias, and the “pain of selling” can push people to hold onto investments even when market fundamentals suggest a pullback.

3. Arguments for staying invested

a. Long‑term growth outpaces any temporary dip.
The article underscores that equities have historically delivered 7‑8 % annualized real returns over the long haul. Even during prolonged downturns—such as the 2000‑02 tech bust or the 2008‑09 crisis—markets have eventually rebounded, albeit after several years.

b. Timing the market is notoriously difficult.
Citing a Journal of Portfolio Management paper, the Globe & Mail explains that even professional money managers rarely beat a simple buy‑and‑hold strategy once fees and transaction costs are included. The article notes that past attempts at “timing” have largely led to lower net returns for most investors.

c. Opportunity cost of withdrawal.
When you sell equities, you miss potential upside. A 3 % annual return over 30 years can double a portfolio, but if you sell during a slump, you forgo those gains. The article uses a quick calculation: selling at a 20 % market dip for 10 years could cost a retiree the equivalent of over $300 k in lost gains.

d. Portfolio construction principles.
Modern portfolio theory (MPT) suggests that a diversified mix of equities, bonds, and alternative assets can smooth volatility. The Globe & Mail references a Vanguard white paper that shows rebalancing a portfolio after a market drop restores the original asset‑allocation balance, thereby keeping the risk profile intact.

4. Arguments for a temporary exit

a. Protecting capital.
The article presents a scenario in which a retiree pulls a portion of his equity allocation—say 25 %—into cash or short‑term Treasury bills. This “partial exit” protects against a steep decline while still preserving a core equity exposure.

b. Reduced psychological distress.
A temporary pull‑back can reduce anxiety during a market slump. The article shares a brief interview with a financial planner, who explains that many clients feel relief after a short-term exit and are better equipped to re‑enter the market calmly.

c. Potential for a “buy‑the‑dip” strategy.
If you exit, you create a window to re‑enter at a lower price, effectively improving your cost basis. The Globe & Mail points out that re‑entry should be staged (e.g., dollar‑cost averaging over 6–12 months) to avoid a new “timing” error.

d. Tax implications.
Selling equities can trigger capital gains taxes if your portfolio has appreciated. The article notes that, in Canada, a capital gain is taxed at 50 % of the gain. However, selling during a market dip could allow you to realize capital losses that offset gains elsewhere, thereby reducing tax liability. A brief link to the CRA’s “Capital Gains and Losses” page is included for readers who wish to explore this nuance further.

5. Practical tools and strategies

The article proposes a “risk‑based withdrawal” framework that incorporates both market outlook and personal circumstances. Key components include:

1. Portfolio risk tolerance assessment.
   Use a simple risk questionnaire (the Globe & Mail offers a downloadable PDF) to gauge whether your comfort level would shift if you had to exit equity markets for a year.

2. Asset‑allocation rebalancing.
   After a market dip, return to your target allocation—this may involve buying equities as the market stabilises.

3. Staggered withdrawal schedule.
   Instead of a lump‑sum withdrawal, adopt a “step‑down” approach—withdraw 5 % of the portfolio annually for the first five years, then taper to 2 % as you age. The article links to an Investopedia guide on the step‑down method.

4. Use of “safe haven” assets.
   When considering an exit, the article suggests increasing exposure to high‑quality bonds or short‑term Treasury bills. It even links to a Morningstar report on the relative performance of Canadian government bonds during 2022‑23.

5. Dollar‑cost averaging for re‑entry.
   After a temporary exit, re‑enter the equity market slowly—allocating a fixed dollar amount each month for 12–18 months. The Globe & Mail cites a Financial Planning study that shows DCA can reduce the impact of volatility by roughly 5 % over a decade.

6. Expert commentary

Throughout the article, the author weaves in quotes from Canadian financial advisors:

• David Sullivan, CFA, of WealthWise Capital: “Most retirees forget that markets have a long‑term upward bias. A temporary exit should be based on cash‑flow needs, not just market mood.”

• Linda Yao, BBA, of Maple Financial Planning: “The key is to create a ‘buffer zone’—cash or short‑term bonds that can sustain a few years of withdrawals in case the market takes a hit. That gives you the flexibility to stay invested.”

The article also references a 2023 Canadian Finance Journal survey that found 61 % of retirees who exited the market temporarily later re‑entered within two years. However, 27 % of those retirees reported a higher level of anxiety post‑re‑entry, highlighting the emotional component of market participation.

7. Bottom line: a balanced approach

The Globe & Mail concludes that “there is no one‑size‑fits‑all answer.” The decision to exit the stock market temporarily depends on:

• Your age and life expectancy.
  Younger retirees (under 65) have more time to recover from a slump.

• Your portfolio’s risk profile.
  A higher equity allocation warrants more caution in volatile periods.

• Cash‑flow needs.
  If you have a steady income stream (e.g., pension, annuity), you may afford to stay invested.

• Tax strategy.
  Capital loss harvesting can offset gains, mitigating the need for an exit.

The article urges readers to treat a temporary exit as a tactical tool, not a strategic one. Rather than “selling the dip,” it suggests rebalancing or a staged withdrawal, coupled with a disciplined re‑entry plan.

8. Resources and next steps

The article supplies several actionable links for readers who wish to dig deeper:

• Risk Tolerance Assessment PDF – downloadable from the Globe & Mail’s investor resources.

• Morningstar’s “Bond Performance” report – for evaluating short‑term bond options.

• CRA’s “Capital Gains and Losses” page – for tax planning insights.

• Investopedia’s “Step‑Down Withdrawal” guide – to learn about systematic withdrawal rates.

The author recommends scheduling a meeting with a qualified financial planner, especially if you’re contemplating a significant portfolio shift. A conversation can help align your risk tolerance, tax situation, and withdrawal needs.

In sum, the Globe & Mail’s article is a nuanced, research‑backed primer that equips retirees and near‑retirees with a clear framework to decide whether a temporary exit from equities is appropriate. By balancing the psychological relief of a short‑term exit against the historical advantage of long‑term equity ownership—and by employing proven tools like rebalancing, staged withdrawals, and tax‑efficient strategies—investors can navigate market volatility with confidence and composure.