Posted on May 26, 2022

The volatility in the financial markets have many 401(k) plan participants asking for guidance on how to weather the storm and manage their assets. Charles Schwab Co. has six tips participants should keep in mind in today’s unpredictable market.

  1. Keep Doing the Right Thing
    Continue to make contributions to your retirement account. Social Security may not cut it for many. That means we need a backstop, and that backstop is our own savings and investing.

  2. Don’t Succumb to the Market Roller Coaster
    Many studies have documented how individual investors, and even professionals, chase performance. When markets are doing well, investors get less concerned about risk and put their money to work in investments that have been doing well recently. Too often that means investing while looking through a rearview mirror. In the real world, that simply doesn't work out too well.

  3. Thinking About Risk Investing
    ...is always about finding that delicate balance between your desire for high rates of return with the dread and pain that comes from losing our hard-earned money. Determining the level of risk you're comfortable with is incredibly difficult and sometimes is revealed only when rough times, like now, arrive. Your capacity for risk matters, as well.

  4. Take a Close Look at Your Account
    While you're rebalancing your account, take a close look at what's in it. When you allocate your contributions, which investments are they going toward? Do you still feel good about those choices? Your plan might have added new choices since you enrolled. Now is a good time to take a look at those new choices and see if any of them make sense for you. It's also a good time to take a look at your contribution level. Does that level still make sense?

  5. Rebalance your Investments
    Rebalancing your portfolio to bring you back in line with what you originally intended. Rebalancing does require effort on your part. It requires you to periodically monitor your account and adjust either the amount you have invested in different investments, or to change how new contributions to your account are allocated. To make this process easier, your plan may have an investment choice where rebalancing is done for you automatically.

  6. Treat Your Account Like a Lockbox
    Only to be opened when you reach retirement. Withdrawing from your retirement account should be a last resort. It can be costly
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