Adjusting Retirement Assets In A Bad Market

August 28th, 2007  |  Published in Asset Allocation

My retirement is broken up into four accounts, the first is a SEP-IRA, the second is a Roth IRA, the third is a Rollover IRA (traditional IRA whose originated funds came from a former 401k), and a 401k. Within the four, I’m basically in a mix of mutual funds with the exception of the Roth IRA, which is half in a Target Retirement and half in individual stocks for me to play with. So, given the turbulent market and the fears of the subprime meltdown, and the after effects, do you know what I’ll be doing with my asset allocation?

Nothing. Yep, I’m doing nothing. This is the from the guy who liquidated his Target Retirement 2050 position a few weeks ago because of how the market looked. I still stand by that decision and I conceded that I sold the 2050 because I didn’t have a good plan and, when I figured out the plan, I realized I shouldn’t have been in 2050 in the first place.

So why the apparent reversal? It’s not truly a reversal, I have a clear cut plan with my retirement assets, in part because of legal mandates, and in the long term stocks will recover whatever minor blips there could possibly be, which this will be. Even if you think the financial markets will recess, as you must have expected after the dot-com bubble, they will eventually correct themselves and in the long term you will be perfectly okay.

  

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