401(k) Allocation Review

When the stock market takes a down turn, what should be done
with the allocations in my 401(k) to keep from loosing money?

By the time you receive the quarterly report showing the account
has lost money, it is probably too late to take any adjustments.

There are several steps that can be taken to reduce the loss in a
down market. The overall strategy is to buy low and sell high.
Changing allocations after the money has been lost will prevent
receiving the gain when the market turns around.

When you watch the evening news, make note of the Federal
Reserve prime interest rate, the change in the S&P 500, and the
trend of the stock market, up or down .

The prime interest rate shows what is going to happen short
term. Interest rates going up, stock market/bond market
going down, and economy slowing down.

This is the time to decide what action needs to be taken. The
closer you are to retirement will determine the action that needs
to be taken.

The investment company who is the fiduciary for you retirement
plan (401(k),403(b), 408 (a), or 457 Deferred Compensation will
change allocations per your instructions. Their income is made
managing the funds in the different variable accounts. It the
future retiree’s responsibility to keep track of the allocations
to minimize the loss in a down market.

For more financial information go to makemoneywork.info.