Riding the Bear’s and the Bull’s

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Market ups and downs have really taken a toll on many people who have seen the value of their 401K take a huge hit this year. A lot of people have decided to cash out of the market instead of riding out the volatile uncertainty. The question others have asked is “is this a good idea?” Money markets, CDs and Treasury Bills are safe, but should they really be considered long-term investment tools? When you take a look at the rate of return of these options, you will quickly see that the roughly 4% they will return won’t be enough to cover the rate of inflation and the taxes on the growth.

The main goal is to find a portfolio mix that will meet your retirement goals that also mirrors your tolerance for risk. Money Magazine has a good article that lists 5 ways to tame your market fears The primary focus of the article deals with the pros and (mostly) cons of pulling out of the stock market.

While no one likes to lose money in their 401k, 403b, IRA, or other retirement account, we need to understand that there will always be ups and downs with the market. I am reminded of a great Bible verse from the Book of Proverbs: