401k Help: What to Do in Rough Markets

Many people start looking for 401k help during rough financial markets. If you are unsure of what you should be doing when times are tough in the market, here are a few things for you to consider.

Move away from Equities

Many people keep a majority of their retirement money invested in equities. Although equities or stocks can provide you with superior returns over the long term, they also carry with them a great deal of risk. Most stocks will tend to go downward together during bad financial markets. Therefore, you might want to liquidate the majority of your holdings in stocks and move them into fixed income assets, such as corporate or government bonds. This will eliminate much of the risk in your investment portfolio and still provide you with a regular rate of return.

More Research

Just because many stocks will decline in value during bad times does not mean that every stock will perform poorly. However, if you are going to identify which stocks have a good chance of succeeding during rough times, you will have to do your homework. You need to do a very thorough job of researching your investments before you choose them. Utilize resources such as MorningStar and the "Wall Street Journal" to find investments for your portfolio.

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