Skip to content
Rating Business

Rating Business

Business Plans

Primary Menu
  • Rating Business
  • Advertise Here
  • Contact Us
  • Privacy Policy
  • Sitemap
  • Home
  • 9 Things to Do Right Now If Your 401(k) Is Tanking
  • business & finance

9 Things to Do Right Now If Your 401(k) Is Tanking

By Laci Mccorvey 1 month ago

Table of Contents

  • Keep things in perspective
  • Try not to look
  • Remember why you’re investing
  • Volatility is normal
  • Stocks are ‘on sale’
  • Turn off the news
  • If anything, rebalance
  • Avoid drastic, impulsive moves
  • Continue dollar-cost averaging


Personal Finance Insider writes about products, strategies, and tips to help you make smart decisions with your money. We may receive a small commission from our partners, like American Express, but our reporting and recommendations are always independent and objective. Terms apply to offers listed on this page. Read our editorial standards.

  • If you have decades before retirement, experts say you should ignore the balance in your 401(k).
  • You have years to make up for current losses, and the market always goes up.
  • Keep contributing on a regular schedule, and avoid impulsive moves.
Loading Something is loading.

Many investors felt on top of the world when it came to their finances at the end of 2021. After all, the S&P 500 returned over 26.61% for the year and the Dow Jones Industrial Average returned a respectable 18.65% last year to boot.

Related Posts:

  • $0 Opening Deposit, Solid APY

But, we all know what has happened since the beginning of 2022. Inflation is surging, reaching a 41-year high of 8.5% as of March 2022. Financial markets are also down, with the S&P 500 more than 18% lower than it was on January 1, 2022 (as of this writing).

If you have taken a peek at your 401(k) or other retirement accounts recently, you are probably well aware of what is happening — and the pain that comes with it.  But what can you even do about it? 

We interviewed several financial experts to find out their thoughts on what individuals and couples should do with their retirement savings in 2022. If you’ve been losing money in your 401(k) and wondering how to handle it, read on to hear their advice.

Keep things in perspective

While watching your retirement portfolio drop like a rock is never fun, financial planner Taylor Schulte of the Stay Wealthy Retirement Show says you have to look at this issue from more than one point of view.

Schulte says that, while the S&P 500 is off to the worst start since 1939, it is still up approximately 25% since January 1, 2020. 

“Investing is hard. It’s also risky,” he says. “And that’s precisely why the long-term rewards are so great.”

Try not to look

Chicago financial planner Roger Wohlner says the vast majority of people should ignore the markets and move forward with their 401(k) investing strategy. After all, this year’s dips in your portfolio may be nothing more than a blip on the radar several years from now.

“Movements in the stock market, even steep declines as we’ve seen in recent days, are short-term,” he says. “Investing in your 401(k) for retirement is a long-term proposition.”

Remember why you’re investing

According to Los Angeles financial advisor Greg Vojtanek of Fade In Financial, it’s important to remember why you’re in a 401(k) to begin with. For every single person who uses this type of account or any other retirement account, you’re investing for the future.

“While this market may sting right now, you’re not investing in a 401(k) for right now,” he says. “You’re investing in a 401(k) because it will create better returns over time.”

Volatility is normal

Financial advisor Matthew Jackson of Solid Wealth Advisors says it can help to look back longer term to see how markets have reacted. When you do, you’ll find that the markets have always rebounded once enough time has gone by. 

“Since its inception, the NYSE has endured world war, regional wars, presidential assassition, Black Monday, the dot-com crash of 2002, 2007, 2008, and COVID-19,” he says. “Yet, the NYSE continues to grow higher.”

Stocks are ‘on sale’

If you have several decades to retirement and you’re worried about losses in your portfolio, try to think of it as an opportunity, says financial advisor Travis Gatzemeier of Kinetix Financial Planning.

“The more shares you can accumulate while building wealth, the more you’ll benefit in the long run,” he says. 

Gatzemeier adds that your ongoing contributions are buying more shares with fewer dollars, and that you should focus on the number of shares rather than the value.

“Retirement account investments are earmarked for the long term, so keep in mind that you likely won’t need this money for short-term obligations. This can help separate your behavior from your money.”

Turn off the news

If you are constantly watching the financial news or listening to pundits talk about the stock market, financial planner Marianne Nolte of Imagine Financial Services says to cut it out.

Not only should you avoid checking your accounts daily, but you have to stop listening to the media hype. 

“It is easy to get excited by market highs and depressed by market lows,” says Nolte. “A steady approach over time is the better investment strategy.”

If anything, rebalance

While most retirement savers should do absolutely nothing in light of recent market downturns, some investors may want to take the time to rebalance their portfolios right now. Financial coach and former financial planner Michael Ryan says this can make sense if your portfolio is no longer aligned with your investment goals. 

How does rebalancing work? Ryan says rebalancing involves “selling some assets that have increased in value and buying others that have lost value, in order to restore your desired asset allocation.”

If you’re unsure whether you should rebalance or how to go about it, you can always reach out to a financial planner for help.

Avoid drastic, impulsive moves

Financial advisor David A. Fowler of High Mountain Financial says that, no matter what you do, you should avoid making any big moves with your retirement funds. He adds that far too many people move their retirement investments to cash during market downturns, and that this move does nothing other than making those losses permanent.

When people get scared during a decline and go to cash, they have usually lost 20%, 30%, 40% or more of their portfolio, he says. At that point, however, they are too scared to get back in after the market has recovered. From there, it’s common to stall so long they miss some or all of the gains that occur as the markets climb back up.

Continue dollar-cost averaging

Finally, Robert R. Johnson, professor of finance at Heider College of Business, Creighton University, offers this piece of advice: Don’t change anything because of market conditions. Instead, he says to continue dollar-cost averaging into a diversified market index mutual fund or an ETF.

“Dollar-cost averaging is a simple technique that entails investing a fixed amount of money in the same fund or stock at regular intervals over a long period of time,” he says. “You should continue that practice whether the market is going up, down, or sideways.”

Holly Johnson

Freelance Writer



Source link

Tags: Amazon Fba Business, Atlanta Business Chronicle'S, Boss Baby Back In Business, Business Administration Degree, Business Attire Women, Business Card Design, Business Cards Templates, Business Casual Dress, Business Casual Outfits, Business Checking Account, Business Credit Card, Business For Sale Near Me, Business Intelligence Platform, Business Lawyer Near Me, Business Loan Calculator, Business Name Ideas, Business Professional Women, Business Spectrum Login, California Business Entity Search, Capital One Spark Business, Carl Weber'S The Family Business, Charlotte Business Journal, Custom Business Cards, Delaware Business Search, Fl Sos Business Search, Florida Business Search, Harvard Business Publishing, Insurance For Small Business, Kelley School Of Business, Maryland Business Express, Maryland Business Search, Moo Business Cards, National Business Furniture, New York Business Search, Ohio Business Gateway, Onedrive For Business, Online Business Ideas, Paramore Misery Business, Risky Business Cast, Small Business Insurance, Spectrum Business Customer Service, Tom Cruise Risky Business, Us Small Business Administration, Verizon Wireless Business, Verizon Wireless Business Login, Virtual Business Address, What Is Business Administration, Women'S Business Casual, Yelp Business Login, Yelp For Business

Continue Reading

Previous Which Military Bank Is Best?
Next Russian Economy ‘Imploding’ Under Pressure of Ukraine War Sanctions

Recent Posts

  • Republican state attorneys general file petition for review in court, challenging fuel economy standards
  • General Mills Is Seeing New Highs on the Charts
  • SmallBizLady’s 2022 Small Business Summer Reading List » Succeed As Your Own Boss
  • Horizon Technology Stock: Put This 10.4% Yield On Your Radar (NASDAQ:HRZN)
  • How to Buy an Existing Business » Succeed As Your Own Boss

Archives

  • July 2022
  • June 2022
  • May 2022
  • April 2022
  • March 2022
  • October 2021
  • September 2021
  • August 2021
  • July 2021
  • June 2021
  • May 2021
  • April 2021
  • March 2021
  • December 2020
  • November 2020
  • November 2018
  • October 2018
  • January 2017

Categories

  • business
  • business
  • business & finance
  • finance
  • general
  • Rating Business

visit now

home improvement warehouse
Intellifluence Trusted Blogger

backlinks

textlinks

bestwindshieldwipers2019.xyz © All rights reserved. | Magazine 7 by AF themes.
We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. By clicking “Accept”, you consent to the use of ALL the cookies.
Cookie settingsACCEPT
Privacy & Cookies Policy

Privacy Overview

This website uses cookies to improve your experience while you navigate through the website. Out of these cookies, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may have an effect on your browsing experience.
Necessary
Always Enabled
Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
Non-necessary
Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.
SAVE & ACCEPT