What Should You Do With Your 401k When Stocks Are Down

TL;DR

Learn how to invest in your own money and take control of your long-term portfolios to see gains.

Transcript

the average 401K lost 20 of its value last year what should the audience do to increase gains in their long-term portfolios this should come to Market Mondays live in Los Angeles first thing best decision that you can make I wrote that down hey I mean listen two tax two index no stress but the truth is like you have to learn going back to the accou... Read More

Key Insights

• 🛀 Investing in equities over the long term has historically shown positive results.
• 👻 Dollar-cost averaging allows investors to buy securities at lower prices during market downturns, increasing potential returns.
• 🥺 Staying invested and continuing to contribute to retirement plans during economic crises can lead to favorable outcomes.
• 🌱 Target Date Funds offer a convenient and beneficial option for retirement planning within 401k plans.
• 🍉 Long-term investing requires discipline, patience, and staying the course.
• 🔬 Over a 20-year period, investing in the S&P 500 has historically been profitable.
• 🤩 The key to successful investing is diligence and having a long-term perspective.

Questions & Answers

Q: How can individuals increase gains in their long-term portfolios?

By taking control of their investments and learning how to invest in equities, individuals can potentially see higher returns in their long-term portfolios.

Q: Why is dollar-cost averaging important?

Dollar-cost averaging enables investors to buy stocks at lower prices during market downturns, increasing the potential for higher returns when the market recovers.

Q: What happened to individuals who panicked and stopped contributing to their 401k during the 2008 economic crisis?

Individuals who stopped contributing to their 401k and moved their funds to more stable options missed out on the subsequent 42% stock market increase the following year.

Q: What are Target Date Funds, and why are they beneficial for 401k planning?

Target Date Funds are retirement funds that automatically reallocate investments to become more conservative as the investor approaches their planned retirement year, providing a low-maintenance and beneficial option for long-term investing.

Summary & Key Takeaways

• Investing in equities, such as stocks, over the long term has consistently shown positive results.

• Dollar-cost averaging is crucial for buying stocks at low prices and increasing returns in the long run.

• During economic downturns, like the Great Recession and the COVID-19 pandemic, staying invested and continuing to contribute to your 401k yields favorable outcomes.