As we figure out the path of the economy in a currently high record-level market, many people wonder what to do with their 401(k). Whether the market is bullish or bearish, there are some considerations about your plan that are consistent in any situation. But especially when the market is high, it’s a good time to review your 401(k) plan to insure you have the proper balance (which we believe should be within 5%) in regards to your target allocation. To achieve this, diversified revenue sources and investments designed for both short-term approaches as well as long-term results should help cover various degrees of risk to ensure a balanced portfolio.
Another important consideration is to tune out all the static from a wide variety of sources promoting everything from “the end of the stock market as we know it: to “it’s going to be a long and happy Bull Market”. The key is to develop a long-term strategy with your financial planner and stick to it. Besides keeping your portfolio balanced, other strategies like reinvesting dividends will let your earn compounded interest and provide a buffer against any capital losses. And as always, meet company matches with as much as you can afford to increase you monthly contributions and your overall wealth accumulation.
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual. There is no guarantee that a diversified portfolio will enhance overall returns or outperform a non-diversified portfolio. Diversification does not protect against market risk. No strategy assures success or protects against loss.