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How to manage your 401k or 403b plan during a time of market volatility?


For most people with retirement plans, stock market volatility can take its toll. Given that a majority of plan holders have exposure to equities than ever before, recent dips may feel like serious threats to one’s retirement goals. Keep in mind that sticking to the long-haul was part of the plan all along, and that part still remains as solid as it ever was.



1)   Hey we get it – Stock Market Declines are Worrisome – but don’t throw the baby out with the bathwater! The best thing to do is to add more. Yep, we went there – do what others are not doing… that’s the surest way to success. If you are already maxed out in your deferrals, which is quite possible insofar as it is now year-end, you may choose to do a rebalancing, but that’s as extreme as we’d go.

2)   Remember, Diversity and Perspective is the Key to riding out these market cycles. If you are one of the 70% of participants with assets in a Target Date fund, keep in mind that these funds automatically rebalance, so you need not too. If you chose one with too high an equity exposure for your personal tastes, you may want to consider rebalancing to other funds with a date closer to today (lower equity exposure).



3)   It’s a Marathon, not a Sprint! Maintain a long-term view. EVERY INVESTMENT fluctuates in value. There would be no risk if it didn’t, right? No matter how good the stock, nor the company, nor even the financials and story behind it, capital market’s adjust, which is exactly what they are supposed to do – and it can seriously suck, no nice way to say it. 

This is not a chicken little “the sky is falling” moment. All is not lost. Follow some of the principals above, and please switch off the CNBC / 24-hour news cycle, which runs counter-intuitive to having long-term discipline. 

Lastly, if you are losing sleep over your holdings and your allocations, then there may be a chance that perhaps you were not properly allocated from the start, or you heard the risks (markets go up and down), and chose to ignore? If you need to speak with someone, there is no shame in that – all the best have coaches who test and push us to be our best selves. A good advisor can very much be that financial guru you.


Continued health and success!

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Hauppauge, NY 11788

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