I’m sitting in a suite at the Renaissance Esmerelda in Indian Wells, California, not far from Palm Springs. It’s great to get away from reality for a few days, especially when family is covering the bill. I’ll be heading back to the Orange County area tomorrow, and back home to New Jersey on Saturday.
I had a few minutes before heading to Joshua Tree so I wanted to welcome new readers and point people to a letter emailed to CNN Money: Madeline from Michigan is concerned because her 401(k) has lost $1,000 in value since the beginning of March.
Walter Updegrave, answering the letter, advises Madeline not to worry so much about her day-to-day balance. Making changes after the fact is reactionary and any changes after noticing the downturn won’t make sense without special insight into the market.
Here are his tips for her: Think about the long term. Small changes in the market are nothing to worry about when retirement is many years away. Leave your mix alone, except for periodic rebalancing. If your mix of funds or other investments is in tune with your goals, making major changes in asset mix is unnecessary. Relax. Don’t check your balance every day.
Speaking of relaxation, I’m going to go enjoy the weather out here in the California desert, and ignore the fact that my investments have also sunk a bit the past month or so.
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My 401(k) is getting murdered but this is solid advice. It’s a retirement account… let it do it’s thing. If you believed in the S&P’s 11% historic return, keep believing in it. :)
I thought maybe I was the only one who’s 401 was taking a slight nosedive. Good to know otherwise. Guess I’ll just ride it out.
Too many people “buy high and sell low” by jumping into the market when stocks are soaring and getting out when are dropping. With 30 years left until my retirement, I not only don’t sweat the drops, I actually look forward to them knowing that they mean I’ll be picking up more shares for my money (dollar-cost averaging).
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