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Jamie Dimon just told Wall Street the good times are “close to as good as it gets” — minutes after his bank posted the biggest profit in its history (1).
When the man running America’s largest bank celebrates a record $21.2 billion quarter and warns you in the same breath, it’s worth a pause. “We just don’t know how long it’s going to last,” he added (1).
I was a stockbroker during the Black Monday crash of 1987, and I’ve traded through the dot-com bust, 2008, and 2020. The one thing all four taught me: The warning and the panic are two very different things.
Dimon isn’t alone. Berkshire Hathaway — the company Warren Buffett built — is sitting on a record $397 billion in cash, the biggest pile it’s ever held (2). Buffett himself, in a recent CNBC interview, said it’s “tough to find values when everybody is preferring gambling” (3). By one gauge that he made famous, stocks are more expensive than at almost any point in history (4).
The warnings are real. Panic-selling your retirement is not the answer to them. Here are five moves to make instead.
1. Don’t do the one thing that reliably loses money
Every downturn, the same story plays out: Frightened investors sell near the bottom and miss the rebound. It feels safe. It’s the most expensive move there is.
The math is brutal. A $10,000 stake in the S&P 500 over the 20 years through 2024 grew to about $71,750 — but miss just the 10 best days and you’d end with $32,871, less than half (5).
Here’s the trap: Seven of those 10 best days happened within two weeks of the 10 worst (5). The people who flee in the panic are the ones who miss the bounce.
2. Build a cash cushion so you’re never a forced seller
Panic-selling usually comes from need. A bill lands, there’s no cash, so you sell stocks in a slump to cover it. The fix is to set the cash aside before the storm, not during it.
Keep a year or two of living expenses in cash so a bad market never forces your hand. Even Buffett’s Berkshire is holding a record pile of it (2) — dry powder is a strategy, not a failure.
Switching to a better bank account is one of the easiest edges out there. If you’re still at a traditional brick-and-mortar bank, you may be paying monthly checking fees while earning almost nothing on your savings.
One idea? SoFi offers a combined checking-and-savings account with no account fees, and with eligible direct deposit you can earn a competitive APY on savings — many times the national average. (APY is variable and can change at any time.)
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3. Right-size your risk before the market does it for you
A 30-year-old can ride out a crash and barely feel it a decade later. Five years from retirement, the same crash can reset your whole timeline. That’s sequence-of-returns risk — the quiet killer of retirement plans.
If you haven’t rebalanced as you’ve gotten older, you may be holding far more stock than you realize. A market at record highs is exactly when that gets dangerous.
An idea to consider: Get a second set of eyes. Talk to an expert, especially if you’ve got big profits to protect.
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Quick gut-check — if your money advice is coming from random online influencers, you’re playing a dangerous game. I’ve been a CPA since 1981 and writing about money since before the internet existed. Sign up for the free Money Talks Newsletter and get expert advice that’s been tested by time.
4. If you’re 62 or older, know your options
If you’re depending on your savings to supplement your retirement income, and most of us are, don’t forget there are other ways to generate income, at least if you own a home.
One option people overlook is tapping home equity with a reverse mortgage. They’re not right for everyone — there are real costs and it reduces what you leave your heirs — but for the right household it’s a great way to gain extra income without having to bleed your savings.
If you’re 62 or older, you might want to check it out. A reverse mortgage lets eligible homeowners convert part of their home equity into income — while keeping ownership of their home.
*A reverse mortgage still requires borrowers to pay property taxes, homeowners insurance and home maintenance. The loan must be repaid when the home is sold or the last borrower leaves the home.
Use your reverse mortgage to cover everyday expenses, build an emergency cushion or make home improvements.
See how a reverse mortgage works and whether you qualify.
5. Ignore the doom — and the hype
For every Dimon calmly noting risk, there are a hundred online voices screaming “sell everything” or “the dollar’s collapsing, put it all in gold.” Both extremes empty your pockets.
Dimon said the current mood reminds him of 1972, 1986, 2000, and 2007 — years that preceded painful crashes (1). But notice what he didn’t do: He didn’t tell anyone to dump their portfolio. He told them to pay attention.
I’ve always put it another way. When the market starts getting overvalued, as it is today, I don’t always adjust my portfolio, but I do adjust my expectations.
Here’s what four decades of watching markets taught me: The crash always looks obvious afterward and impossible to predict beforehand. Nobody rings a bell at the top — not even Jamie Dimon, who’s careful to admit he doesn’t know when.
So don’t try to be a hero. Set your cash cushion, right-size your risk, and stop refreshing your account balance every morning.
The goal was never to time the market perfectly. It was to build a life you enjoy no matter what the market does next.
Sources: Fortune (1); CNN Business (2); CNBC (3); The Motley Fool (4); CNBC / J.P. Morgan Asset Management (5).
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