Fears of a recession and retaliatory tariffs from China, Canada and other countries prompted Monday’s selloff of stocks on Wall Street.
With that sell off, many with a 401(k) plan are worried they could lose their savings.
Clayton Bill, the director of investments at Indiana Trust says while Monday saw a big loss, sell-offs are normal.
“It’ll certainly impact the 401(k) balance that’s invested in the stock market. And, you know, the type of volatility we’re seeing in the market really isn’t that unusual. It’s usually the case that the market sells off between 10 and 15% in a given year,” Bill said.
Bill adding that your investment portfolio should be diverse to try and negate any major impacts.
If too much money is placed in one stock, it can mean bad news for your future.
“The U.S. stock market’s been dominated by a few big companies, so I don’t want to downplay that. But there’s also, you know, in any sort of thoughtful asset allocation approach, there’s going to be international stocks, for example. So there’s, there’s just ways to help diversify around those kinds of risks,” Bill said.
Another point of emphasis is t not react to what the market is doing day-to-day.
Selling investments should only be done for a necessary reason.
“If you’re in retirement, you’re living off your 401(k) balance, then you know that that shouldn’t be the driver for, you know what’s going on in markets probably shouldn’t be the driver for making major changes to your game plan,” Bill said.
Bill says anyone with concerns about their investment risk level or regarding their 401k plan should reach out to their financial advisor or investment managers to get any questions answered.
