401k Worries? Chill Out and Keep Reading.
We had an unexpected visitor at the office this week. Our 401k Rep was making a “house call” to soothe all the rattled nerves and calm all the anxious worriers who had just opened their quarterly statements and discovered the meaning of numbers in parentheses. At least that was the plan.
She began by talking about stock market crashes of years’ past and how the market always recovered, usually within two years. Then she talked about how individual investors don’t generally perform well because they tend to buy high (when the market is full of hype) and sell low (like right now, when people are scared and want their money in cash). Of course, that is the opposite of how we are supposed to invest.
Judging by the somewhat heated question and answer period that followed, I don’t know if she calmed people down or just gave them a target to vent their frustrations. Or maybe a little of both. Nobody likes to lose money, after all. I wondered how many of them would stop contributing to their plans.
For my part, I kept thinking about Warren Buffet’s advice, “When they’re greedy, be fearful. When they’re fearful, be greedy.” Now I don’t think we should ever be greedy, but I do plan to max out my Roth IRA this week, while the markets are still down. We’ll see what happens.
Andrea
Your Warren Buffet quote is a fabulous one, and a good rule to live by, provided we heed your advice and maybe change the second greedy to “be ambitious” – I think that has a nicer, less Scrooge-like ring to it.