Don’t look at your 401k balances today; it has no impact on your long-term investment outlook

by mart1373

I’m sure this will get buried among the many posts today, but it bears repeating: short-term fluctuations in the stock market are short-term. The fact that the market is down right now does not affect your long-term investment outlook, as stocks are a long-term game. If you sell now, you will lose out on the rebound, just as my parents did during the financial crisis of 2008/2009. You do not want to sell now unless you are selling as part of your financial planning objectives that you have identified long before the whole Coronavirus panic hit.

Edit: this did not, in fact, get buried among the other posts today. RIP my inbox

Edit2: to answer some common questions:

  1. “Is now a good time to invest?” – that’s a weighted question, and not one I can answer directly. There are many factors to determine whether or not it’s a good time to invest. Please refer to the wiki for investing resources to see if now is a good time for you to invest.
  2. “Should I be reallocating from stocks to bonds now?” – as mentioned above, reallocations should be evaluated as part of your overall retirement strategy. A reallocation is basically selling some investments and buying others in place of those you sold; as such, it is generally unwise to reallocate in response to a single event and should really be done as part of your strategy towards retirement (e.g. reallocating from stocks to bonds as you get older to limit risk exposure).
  3. “Will xxxxx affect me?” – I don’t know. Although I am a financial professional, if you have any questions relating to your particular circumstances, you should seek out a financial professional outside of Reddit or refer to the wiki in this sub for specific information.
  4. “What if you’re close to retirement? Should I sell?” – if you’re close to retirement, the general financial planning consensus is that you should not have a significant percentage of your wealth in equities. Example allocations would be anywhere from 80/20 or 90/10 bonds to equities. If you have any more than 20% equities and are close to retirement, yes you should probably think about reallocating to bonds, but not because of this recent stock market panic. Again, please consider speaking to a financial professional or using the sub’s wiki for additional info.
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Disclaimer: This information is only for educational purposes. Do not make any investment decisions based on the information in this article. Do you own due diligence.

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