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5 Reasons To Leave Your 401(k) Alone When the Stock Market Drops

The article from MSN Money outlines five reasons why investors should consider leaving their 401(k) untouched during stock market downturns. Firstly, it emphasizes the importance of long-term investment perspective, noting that markets recover over time, and staying invested allows one to benefit from the eventual upswing. Secondly, dollar-cost averaging is highlighted, where regular contributions buy more shares when prices are low, potentially leading to greater gains when the market rebounds. Thirdly, avoiding emotional decisions is crucial; panic selling can lock in losses and miss out on future gains. Fourth, the article discusses the risk of missing the market's best days, which often follow shortly after the worst days, suggesting that pulling out could mean missing significant recovery periods. Lastly, rebalancing is mentioned as a strategy where downturns can naturally adjust an investor's portfolio back to its intended asset allocation without the need for selling assets at a loss. The piece advises maintaining a steady course with retirement investments despite market volatility.

Read the Full MSN Article at:
[ https://www.msn.com/en-us/money/savingandinvesting/5-reasons-to-leave-your-401-k-alone-when-the-stock-market-drops/ar-AA1xrfNN ]