🇺🇦 We Stand With Ukraine

National Wealth Management Joins Cary Street Partners – Further Expands Cary Street Partners’ New Jersey Presence Read More

Retirement Perspectives

6 Tips for 401K Investing In Today’s Volatile Market

With the recent volatile financial markets, many 401k plan participants are asking for guidance on how to manage their 401k plan assets. To help provide some guidance, Charles Schwab & Co.* has released these six tips from Senior Vice President Mark W. Riepe, CFA. Participants should keep these tips in mind as they manage their 401k in today’s unpredictable market.

1. Keep Doing the Right Thing

Continue to make contributions to your retirement accounts. Our economy isn’t the greatest right now, but the fact remains that practically all of us will retire from the work force at some point in our lives. Even those of us who love work and can’t imagine doing anything else will come to a point where we can’t work any longer.

2. Don’t Succumb to the Market Roller Coaster

Many studies have documented how individual investors, and even professionals, chase performance. When markets are doing well, investors get less concerned about risk and put their money to work in investments that have been doing well recently. Too often that means investing while looking through a rearview mirror.

3. Think About Risk

Investing is always about finding that delicate balance between our desire for high rates of return with the dread and pain that comes from losing our hard-earned money. Determining the level of risk, you’re comfortable with is incredibly difficult and sometimes is revealed only when rough times arrive.

4. Rebalance Your Investments

Periodic rebalancing is always a good idea, but it is particularly appropriate right now. Since the latter part of 2007 and in 2015, the stock market has periodically taken investors on a wild ride. It would not surprise me if you were to look at your account right now and find that it is out of balance and deserves some attention.

5. Take a Close Look at Your Account

While you’re rebalancing your account, take a close look at what’s in it. When you allocate your contributions, which investments are they going toward? Do you still feel good about those choices? Your plan might have added new choices since you enrolled. Now is a good time to review those new choices as well as your current contribution level.

6. Treat Your Account Like a Lockbox

This year has been tough for many working families. In times like this, it’s tempting to tap into your retirement savings accounts but the penalties and taxes will cost you in the short and long term. Withdrawing money from a retirement account is very expensive, and, therefore, is a costly source of money. Treat your retirement accounts as a lockbox, only to be opened when you reach retirement.

Source: Charles Schwab & Co.

Celia A. Rafalko

Celia A. Rafalko, CFP®

Financial Advisor, Retirement Benefits, Managing Director
Raymond James Reibel

Raymond James (R.J.) Reibel, CRPS®

Financial Advisor, Retirement Benefits, Director