What to do after a stock market dive

You didn't win the Powerball and to make matters worse, it's 10 trading days into the new year and what a ride. It's been terrible. Financial consultant Derrick Kinney is doing a lot of hand holding these days.

Let's put things in perspective, the stock market went down to 6,000 less than a decade ago, only to come roaring back. Right now, we are in a period of extreme volatility and investors need to have a plan that works for them.

1. AGE MATTERS:  If you're close to retirement and have a nervous stomach for volatility, you'll want to get more conservative and protect the money you have. If you're just getting started, you have a chance to be a bit more aggressive because you're buying at a cheaper price and at regular intervals.

2. KNOW WHAT'S INSIDE:  You need to understand how your 401k is invested and the potential risk.
If your funds aren't performing well, it may be time for a change.

3. BOND FUNDS CAN FLUCTUATE TOO:  A common mistake people make is moving out of stock funds into bond funds, thinking they're safe. Better bet - move to the money market fund.  It's typically guaranteed and offers peace of mind.

4. BE STRATEGIC BUT NOT STUPID:  Ups and downs are part of the deal. Investors that are say, ages 25-40 with quite a bit of time until retirement, can explore some of the benefits of a lower stock market

5. MOVE THE LUMP SUM TO CALMER WATERS, BUT STAY IN WITH THE NEW MONEY COMING IN:
Want to move all your money out of the market? Try this. Move your lump sum to the money market but keep your monthly paycheck deductions going into the market. This way you protect the nest egg but still can still participate.

LINK: www.DerrickKinney.com
 


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