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401(k) Getting Whacked By The Market?

This article was written by in Investing. 3 comments.


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.

Updated March 5, 2014 and originally published April 18, 2005. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.

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About the author

Luke Landes, also known as Flexo, is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about him and follow Luke Landes on Twitter. View all articles by .

{ 3 comments }

avatar jim

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. :)

avatar MrWolf710

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.

avatar Chris in Maryland

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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