How long should you let 403(b) go losing money before you change investments?
I know that with a 401(k) and a 403(b) you have to ride out the highs and the lows over time but how long should you let your account go when it is losing money before you make a change to your allocations?
In the past 18 months I have contributed $5400 but the balance is only $5067 currently. Is this really bad or are other people experiencing similar losses? My financial planner told me I should go for ‘aggressive’ options because I have over 20 years until retirement but it is discourage to be going backwards. Does anyone have any advice on what I should do?
You should reevaluate your investments at MINIMUM once a year no matter HOW they are performing. NEVER make ANY investment decisions because your ‘financial planner’ told you to do anything. Find a financial adviser that will TEACH you to make your own decisions.
All the stock indices got hit hard at the end of 2007 and even from the beginning of 2008 until now. Don’t feel bad. My TSP took a beating but I’m just chugging away cuz I won’t need the money for another 30+ years and will just ride all the ups and downs along the way. Your time horizon is pretty long. Just keep contributing and don’t look back.
The advice you were given isn’t bad. If you feel like you can take a more risky position becuase you have a longer time horizon, then go for it. If you can’t stomach that much risk, then don’t. Only do it if you understand what you’re doing and feel comfortable doing it. But once you do it, don’t go changing allocations just because the markets swing this way or that.
If you are confident with the quality of investments, then don’t worry about the market downdraft. It’s normal. There will be more. It’s the price of admission
If you are uncertain about the quality of your choices, then consult with a fee-only financial planner such as a CFP
No, you should go more “aggressive” . With that ” aggressiveness ” comes RISK, and at your mid forties you should be scaling back your risk, not exposing yourself…
Tell your financial planner he wont make a commission this time, because that is all he is after, IMNSHO