If you have a 401k plan, you are invested in the stock market. Most financial experts recommend scattering your money between stocks and bonds. Unfortunately, right now, you may be panicking. 2008 was not a good year for the stock market and the economy as a whole. Most individuals invested in the stock market saw their retirement savings decrease, some significantly. Most want to pull out of troubling stocks to invest in new or make the switch to low-risk bonds. On the other hand, many financial experts are advising investors to sit back and wait.
Sit back and wait? Yes. Overtime, the stock market has had its up and downs. It can take years, but it always bounces back. 2008 was the year that the stock market set records and not good ones. It was near an all time low. As previously stated, the market always survives the difficulties. It usually bounces right back. If you are young and do not anticipate retiring for 10 years or more, you are in a good position. You wait for that bounce back. Now is actually the best time to invest more money. Most financial experts say it cannot get much worse than this. In a year or two, stocks will start to improve. When they do, you make money because you bought stock when it was at a low.
Although many financial experts are urging 401k holders invested in the stock market to sit back and wait, this is a lot easier said than done. Every newspaper you pickup, every radio show you hear, and ever news report you watch may focus on the economy. It is definitely a hot topic. Almost every time you turn around, you are reminded that you are losing money. What do you do?
Remember it is a short-term bump in the road. As mentioned above multiple times, the stock market always bounces back. Just consider it a bump in the road and nothing more. Soon that bumpy road will flatten and you will be left with a smooth and hopefully money-filled path.
Remember that now is one of the best times to invest more money. If watching the news, you will regularly hear that stocks dipped. Once again, this may leave you panicking. Always remember that they are low. They will bounce back. This is your opportunity to turn a profit. If you see it as too risky, invest but just invest less. The best way to weather a storm is to avoid the bad news, but focus on the good. You can buy low cost stock. Don’t focus on the reason why it is low, just think of the potential.
Don’t watch or read financial reports in the news. In most instances, experts recommend close monitoring of retirement accounts. Now, the opposite is true. If reading your 401k statement or watching market projections on the news is causing you stress, avoid it. If you are not planning to retire for 10 years, there is no rush. The market will improve before you retire. Whether the storm. Once it improves, you can focus on reallocating your funds to safer investments, but avoid the news for now.
Focus on something else. It is normal to be worried about your retirement. No one wants to lose money, especially their retirement savings. Once again, and it cannot be emphasized enough, the stock market will recover. Pass the time by doing something you enjoy or taking up a new hobby. In fact, a great hobby is frugal living. You are worried about having enough money to retire and rightfully so. Start building a reserve savings account. You can use this money for retirement or costly emergencies. Make a game out of saving money. Collect all your change and guess how much you have. Deposit it in a savings account and get the total. Look for the best sales, use coupons, and so forth.
As you can see, there are many ways that you can take your focus off the troubling stock market. It is okay to be worried about your financial future, but don’t let it consume your life, especially if you still have years to prepare.