Financial expert talks stock market, contributing to your retirement during COVID-19 pandemic

CARY, N.C. (WTVD) -- David Schawel, the chief investment officer at Family Management Securities in Cary, is helping ABC11 answer financial questions for so many people trying to find their way through the stay-at-home orders and COVID-19 pandemic.

Watch the featured video for the full interview. A partial transcript of answers follows.

Carolina Panthers owner David Tepper said today that this is one of the most overvalued stock markets he has ever seen. What is going on with the stock market?

Well, it's certainly confounding for a lot of observers. You know we're in an environment where there's over 20 million unemployed Americans and we're in the middle of a deep recession and there's really no end at the moment to the pandemic. How can the stock market possibly be so high? I think there's a couple answers to that. The first being that the stock market is not necessarily the economy per se, if you look at the S&P 500 or the Dow, a large percentage of those indexes are actually four or five companies. When you look at Amazon, Apple, Google, and Microsoft, they're making up an increasingly larger share of the stock market, so the fortunes of a couple large companies are having an undue influence on the overall stock market ... smaller companies are faring much worse and I think that's more representative of the everyday economy.

Schawel also said stimulus money pumped into the economy has contributed to the boost in the market. Watch the video for an expanded answer.

What about retirement accounts? Should people make adjustments to retirement plans during this uncertain time?

I think the first thing I would say is if your company is giving a match in your 401(k) or other retirement plan, as long as you're in a situation where your finances can handle it, I would continue to contribute towards this. As far as investment choices, I would probably not choose to change your allocation right in the middle of a crisis. Typically, knee-jerk reactions, changes out of fear typically aren't the best things to do, but I would stay the course and stay with your allocation as long as your financial condition hasn't changed. Obviously, if you are accumulating debt, it might be a time to reevaluate whether you want to be making retirement contributions but typically if you can stomach it, I would continue as you are.

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