With the recent uncertainty in the economy, much of the market has been declining. As stocks slow, retirement plans can also slow their growth, even drop in value. The key with these longer-term funds is to not panic.
Even with the lower stock market, it is not a time to sell out on stocks in long-range accounts. Selling is never good when a market is low, but buying is good. If you have some extra money, this would be an excellent time to add to your retirement accounts. If you have a tax return coming, putting some of it into your 401(k) and buying while the market is low, will help you grow your retirement assets faster.
Remember, stock markets can go up as fast as they go down. Selling or moving money into safer accounts now is truly a loss. It is definitely better to wait this slump out. Some advisors will even recommend NOT reading those investment reports, as all they will do is depress you and they are not a true indicator of the big picture.
What many people don’t realize is that the stock market is an indicator of what people think is going to happen in the future. There are many fears that our economy is heading into a recession, which is reflected in the current market. If the economy does hit a recession, most likely the stock market will flatten out. If there is no recession, the market should start to perk back up.
If you are near your retirement, like three to five years away, this is still not an ideal time to sell. You may want to shift a small amount, like 10 to 15 percent of your total into bonds for security, but try not to panic. If you have a few years to go, you could also place your current deposits into safer bond funds as a cushion.
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