THE IMPORTANCE OF MONITORING YOUR MONEY RIGHT NOW!
By: Don 'N.T.' Williams -
For those of us who think the talk about the economy being on the verge of sliding into a recession won't affect you I have two words ......THINK AGAIN!!! The national media's top story Tuesday was the Stock Market and the economy. We've heard over the last couple of days to brace for a rough couple of months, but nothing prepared me for what I saw just a few hours ago. I was reading an article on Reuters' website which showed Bank of America reporting quarterly profits 95% lower than this time last year....This was alarming for 2 reasons. 1.) I bank with them. 2.) I invest in them through my 401k....Imagine my suprise when I viewed my 401k for the first time this year and noticed that I had LOST more than $2,000 since Jan 1, 2008. The shocking thing is that Bank of America is only a small percentage of my total investments. My stocks are sinking across the board, and I'm a moderate, not aggressive investor. I tried to stop the bleeding as much as possible, but my fear is that the short term damage may already be done. My question for all Insite readers is "Have you checked your 401k today?" Were you as shocked as I was?
Well....unless you are 62 years old...your 401k is a long term investment. You can't spend too much time focusing on the minor gains and losses. You have to look at the Big Picture over a period of time.
ReplyDeleteSure - you need to moniter the market, and if necessary adjust your investment mix, but you can't react to every bit of bad news.
Cosign what Anonymous #1 said. Essentially, you are buying business, not gambling your money in Vegas. If the business plan is sound, then the investment is sound.
ReplyDeleteHowever, if the business has changed, i.e., management, market, customers, then you should rethink the investment.
Lastly, are you well diversified? Owning multiple stocks or mutual funds does not mean you are well diversified. You have to look at the asset classes, i.e. US Funds, Foreign Funds, Bonds, Health, Real Estate, Gold.
If you cannot handle the short-term dips, this means that you need a more conservative portfolio.