RETIREMENT
Stay the course
June 8, 2009Things are bad. No question about it. Your 401(k) is way down. Your company may be planning to reduce or eliminate its contribution to your plan. You may have lost your job, or, if not, you’re worried that you might. Your home is worth less. And interest rates and prices may soar when the recession is finally over. It seems like you must do something to prepare for retirement, but what?
Self-defense: At FinancialThreats, we think the most important things are what you should not do. They include:
- Don’t try to predict the markets. You can’t. Nobody can. That simple fact is the foundation of index investing. In the current recession, active investment managers proved once again that they cannot reliably beat the markets.
- Don’t give up on stocks and bonds. The U.S. population is growing; the world population is growing even faster. People need things, so they’re going to buy. When they do, companies will earn profits, and profits drive the markets.
- Don’t buy risky securities just because they look like great bargains. There’s a level of risk appropriate to age and circumstances. Stay with it.
- Don’t keep spending at your previous level. Pull back some. Put more money in your bank account or money market in case you lose your job.
- Don’t be passive at work. Volunteer for projects. Work harder, stay later. At the same time, update your resume. Improve your marketable skills, maybe with a night course. Call friends. Network. Try to identify two or three companies that might hire you. Be ready.
For more articles on Your
Future check the following pages: 401(k)
Plans | Career
Strategy | College
Costs | Life Insurance | Retirement | Social
Security
