Its been 6 years…..My 401k plan has $6,500 (I only contribute 3% per paycheck.) and I asked my retirement advisor if I should move my money to a more conservative fund. He told me to stick with the aggressive portfolio because it’ll have more ups and downs but since I have several years before I retire, I need to stick with it. He says it will outperform any of the conservative funds in the long run.
My Outlook
I’m 33 years old. I’ve invested more money into my 401k plan than is in there right now. I’m skeptical. I can see I’ve had gains all year (+$606.92). Lets just hope my advisor is right. Lets just hope the economy has turned around. Lets just hope the recession is over….they say it is, but it sure is moving slow.
Now, you have to know that I contribute 100% to my 401k plan. My employer does not contribute because I am a government employee and my employer pays money into my pers pension plan.
What I think
Yep, I’ve lost money. But that’s just because the price per share has gone down, not because I lost shares or contrubted less money. I have to remember to keep telling myself that stock prices are low….they will go back up.
Think about this, you’ve lost money because the stock value dropped. Right now, you’re buying the same stock for a lower price. When the stock starts to go back up in value, you’ll gain all the money back you lost and you’ll have a few extra shares to show for it because you were contributing the same amount of money, but you were getting more shares of that stock.
My perspective is the only time I want the stock to be at its highest value is when I’m looking to cash it out. Until then, I don’t care what it does as long as it’s projected to go up. I don’t want to be invested in a loser stock that has no chance of offering me a decent return when I’m ready to retire, but that’s why we hire a retirement advisor. It’s there job to take care of our money and do whats best for us.
Still worried, what can you do?
There are a few that you can do but speak with your financial advisor before proceeding with either one of these options.
- Stop contributing to your 401k. For me that is an option because my employer doesn’t contribute but for most of you this is not an option because if you stop contibuting, so does your employer and you will lose in the long run.
- Move your money to a more conservative fund. By moving you money to a more conservative fund consisting of stocks and bonds, your money will be less dependant on the ups and downs of wallstreet but you won’t ever see that “big gain”….or that “big loss”.
I want everyone to know that I’m not a financial advisor or retirment planner. Before you do anything, talk to a professional.
I am a very conservative, frugle and cheap person who has become very intuitive about money, the stock market and personal finance. That does not make me a professional…SMART but not a professional. I urge you to take my advice and talk to your advisor.
I don’t look to jump over 7-foot bars: I look around for 1-foot bars that I can step over.
-Warren Buffet-
