Don’t Adjust Your 401(k)!

An AP article stated that many retirement investors had begun moving their money out of the stock market, something I see as a huge mistake. This is a big mistake when you’re talking long term, which most retirement investors are, because over the long run the market will give you solid returns if you let it. By selling during a fall you’re just as likely to miss any rebounds. For example, yesterday’s pre-market indicators would make you expect the market would fall 500 points at the opening bell. However, the Fed jumped in, slashed rates by 75 basis points, and the market opened down only 200. Then, in the afternoon, bargain hunters snatched up cheap stocks and the Dow ended up nearly 300 points. That all happened in ONE day. The stock market is a volatile beast, don’t try to time it and definitely don’t try to time it in something like a retirement account!

The game plan for a retirement account is slow and steady wins the race. You can’t realize any appreciation until retirement, so don’t go trying to play the stock market game. Slow and steady, don’t break the game plan!