What happened to my retirement account?

When the bottom falls out, the markets bounce back, but you’re still waiting for your tide to come back in...

Not every investment loss is recoverable, but I’ve been astounded over the years at the number of people who have no idea they can even bring a claim for investment losses and get some or all of their money back.

Smart, sophisticated people who were lied to, misled, or who were even the victims of outright theft.

Particularly in New England, for some reason it seems a lot of people don’t like to talk about investment losses, even with a lawyer. A lot of people don’t like to talk about money at all.

Sometimes people are simply too embarrassed or ashamed. Shame and fear can weigh very heavily on people and cause them to do some very unexpected - and irreversible - things. If you don’t believe that, take a look at the recent story about a young 20-something investor who committed suicide after seeing a $730,000+ negative balance in his RobinHood account. The negative balance was likely the product of a glitch in the online trading company’s app (I don’t know if that makes it feel better or worse, really), but it certainly highlights a very important concept….

Fear of loss, fear of insecurity that comes from the loss of money can have a very serious , negative impact on our health. Even if it doesn’t push someone over the edge, it can cause a lot of physical and mental ailments. Those parts of the loss are almost never (I won’t say never…) compensable, but the damage is real.

From a financial perspective, the loss of a big portion of a nest egg isn’t always irreversible. It may be a situation where it wasn’t your fault. Where it was someone else’s fault. And you may be able to get it back.

There are several situations where it may be more than just bad luck or the product of a regular blip in the markets. I’ll lay out a few of those situations below, but I will also issue the caveat that these types of claims - claims by investors to recover losses - are highly specialized and I cannot recommend enough that anyone who thinks they may have a claim reach out to consult with lawyers who are familiar with these kind of cases.

Here are just 3 of my “red flag” situations that may indicate your losses aren’t just the product of “market activity:”

1. You don’t know what the heck it is you own that took a big hit and hasn’t recovered. Historically, I have seen many products that are complicated, financially engineered “investments” that do little more than cap your gains and make money for the firm that created them. They are often sold as lower risk investments, but many of them have carried risks that are difficult for even the people who sell them to understand or articulate. If you have something “special” that’s taken a beating and hasn’t come back up, it’s worth having it evaluated by an expert.

2. Your risk tolerance changed within the year or so before the market tanked, yet your investment professional didn’t shift your portfolio. Sure, it’s easy for everyone to say their risk tolerance changed before an economic downturn, but if it is clear that you communicated this to your own advisor (directly? in email? do you play golf together so s/he knew darn well you had retired?) and they didn’t have you in for a conversation or propose a re-balance of your portfolio to align with your new objectives, you may have a claim worth evaluating.

3. Plain old negligence. It’s easy to get lost in looking for the complicated answers, but sometimes an investment professional is just plain negligent. Perhaps an order was called in and placed incorrectly, or a product or investment was recommended that really was not consistent with your objectives, or it was really a bad one and they didn’t do appropriate due diligence.

These are just a few examples and there really are a nearly infinite set of possible situations that could give rise to a claim. The only way to know for sure is to have your own case evaluated if you’ve taken a beating, the market has come back, and you’re still waiting for the tide to come back in for your own account.

The most important thing to remember, however, is that no matter what the situation is, it’s just money. No matter how awful it feels to lose it, there can always be more. Our family, our friends, our health… those are the things that matter the most.

And if you’ve lost a ton in the market lately, I invite you to: 1) take your shoes off and stand in the grass; 2) take a deep breath and feel the sun, the breeze, the ground; and 3) click here to book a call for a consultation to see whether there’s something to be done about it.