Steve McKay, Franklin Templeton’s Head of U.S. Retirement, identified the biggest behavioral mistake during market volatility as “turning legitimate economic concerns into an all-or-nothing investment decision.” That wording appears in a Yahoo Finance syndicated search excerpt attributing the comment to an interview with MarketWatch; the full interview and its date could not be verified, so the quote should be read with that limitation in mind.
The practical takeaway is not to ignore economic risks or to never change a portfolio. It is to avoid making a sweeping investment decision solely in response to alarming headlines. A change should fit your time horizon, withdrawal needs, risk tolerance, and written retirement plan.
What McKay meant by an “all-or-nothing” decision
All-or-nothing thinking turns a real concern—such as a recession risk or a sharp market decline—into a binary choice: sell everything, move entirely to cash, or make another abrupt portfolio shift. McKay’s quoted point is that concern may be legitimate while the response can still be poorly matched to an investor’s plan.
The quote is attributed to McKay in a Yahoo Finance search excerpt describing his comments to MarketWatch. Because the syndicated MarketWatch page could not be fully reviewed, the surrounding interview context is not established. The wording is best treated as an attributed statement, not as a complete account of his interview or a personalized recommendation.
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Why a downturn can be especially consequential for retirees
Withdrawals can compound the effect of losses
When a retiree withdraws money while investments are down, fewer assets remain invested to participate in a later recovery. This is known as sequence-of-returns risk: the order in which returns occur can affect how long a portfolio supports withdrawals, even when the average return over a period looks similar. Franklin Templeton describes volatility as a natural feature of investing and explains why withdrawals during downturns can make the sequence of returns important. Franklin Templeton’s U.S. retirement guidance is general educational material, not advice based on an individual investor’s circumstances.
Risk is not limited to selling after a drop
Fear-driven selling is one possible reaction, but investors can also chase recent winners, increase risk after a strong run, or abandon diversification. Each can pull a portfolio away from the strategy it was meant to follow. Franklin Templeton Retirement Strategist Michael Dullaghan put the long-term case this way: “Long-term investing prevails over short-term reactions.”
How to evaluate a portfolio change before acting
Before changing investments because of volatility, compare the proposed move with the actual conditions of your plan. These questions can help distinguish a deliberate adjustment from a headline-driven reaction:
- Time horizon: When will you need the money, and which portion is intended for longer-term growth?
- Withdrawals and liquidity: How much do you expect to spend soon, and what assets are available to meet those needs without selling investments at an inconvenient time?
- Risk capacity and tolerance: Has your ability to absorb losses or your willingness to withstand market swings changed?
- Diversification: Would the change make your portfolio less diversified or concentrate it in a recent winner or a single type of holding?
- Reason for the decision: Does it follow a written plan or a meaningful change in your circumstances, or is it a reaction to the latest forecast?
A plan-based adjustment may be appropriate if spending needs, risk capacity, or other financial circumstances have changed. The distinction is not “change” versus “never change”; it is whether the decision follows a considered review of the plan rather than an all-or-nothing impulse.
Build a response around the plan, not the headline
Review the target allocation and rebalance deliberately
Franklin Templeton recommends periodic plan review and rebalancing. Rebalancing is a way to bring investments back toward a chosen allocation; it is not a prediction that the market will move in a particular direction. Review whether your target allocation still reflects your goals and circumstances before deciding whether to adjust it.
Consider how near-term expenses will be funded
Franklin Templeton gives a general example of keeping one to two years of expenses in cash or short-term bonds. That is an example of its guidance, not a universal reserve requirement: the right liquidity approach depends on an individual’s spending, income, and broader plan.
Use historical examples carefully
Franklin Templeton reports a J.P. Morgan Asset Management analysis finding that, from 2004 to 2024, missing the 10 best days in the S&P 500 would have cut an investor’s overall return in half compared with remaining fully invested. The comparison uses data as of July 31, 2024, and is a historical illustration, not a forecast. It shows why abrupt exits can carry a cost; it does not establish that every investor should hold the same investments or that remaining invested is suitable in every circumstance. Franklin Templeton also cautions that past performance does not guarantee future results. Dullaghan’s article on keeping a 401(k) on track appeared in Kiplinger on July 27, 2025.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What the behavioral figures do—and do not—show
Franklin Templeton’s U.S. retirement-volatility page cites a MagnifyMoney (LendingTree) survey from August 2021 in which 66% of investors said they had made emotional decisions they later regretted, and 47% said they struggled to keep emotions out of investing decisions. These are attributed survey findings from 2021, not current measurements of investor behavior.
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The same page says retirement can last 25 years and cites the Transamerica Institute 2025 Retirement Survey, an August 2021 Journal of Financial Planning source, and CDC life-expectancy data. The figure is presented as a general reason retirees may need growth-oriented investments; it is not a promise about an individual’s lifespan or a prescribed stock allocation. The page’s cited figures and educational material are available in Franklin Templeton’s volatility guidance.
When a professional review may help
If volatility has exposed uncertainty about spending, withdrawals, or how much risk your plan can tolerate, a qualified financial adviser or retirement-planning professional can help you evaluate those questions against your circumstances. Franklin Templeton’s material is general, and investments can lose principal; no allocation or cash reserve described here is a personalized recommendation.
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