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Originally Posted by Cybsled  Based on all the fun shit happening at the moment, how would any the economic gurus on the forum recommend altering your workplace offered 401k/ISP investment mix (the managing company is Fidelity)?
Take everything out of stocks? Still keep some? Use one of their pre-fab investment mixes?
Currently my mix is stock-heavy. |
You should not change a thing right now. Usually right after a financial crisis, the market bounces back within a few days. If you trade into something else safer (like a bond fund) you will be eating the loss. Its only a loss when you trade out of it.
Like Warren Buffett said, the buying opportunities are in the tough times. And the "weak hands" are usually the only ones that lose. If you are going to buy and sell based on fear, you shouldn't be investing.
I think the statistic being bandied about was that on Black Monday (one of the largest point drops in history), the people that sold based on the news lost like 25% of their asses, while the people that held their equities made a killing.
Don't try to time the market. We've always increased our stock purchases in recession (even if it meant that we didn't eat steak or go to the movies or dinner). After the last recession, we saw our portfolio double three years after the economy came back around (which is pretty good) because we bought stock when everyone else was afraid to and getting out.
When you are a long term investor (you are 29), days like yesterday are insignificant. You would only want to move to something safer if you planned on retiring in less than five years.
I can't stress it enough. Tune out the "market noise" and stick to your plan. Even the financial news reporters engage in sensationalism - its almost never as good or as bad as they say it is.
