It looks today like the stock market wants to take money away from you in your company retirement plan account.
After falling more than 340 points, the Dow Jones Industrials ended up closing the day down 249 points.
There are several reasons for this current state of events. The failure of the “Super Committee”, the financial crisis in Europe, the high U.S. unemployment rate, slow economic growth, can all be easily blamed for the falling stock market.
Right now, even if you could go out and find some good economic, employment or housing news, the stock market would totally disregard the information. In the current stock market environment, good news is bad news and bad news is bad news.
Today, you need to focus on what the world wide economies and stock markets are telling you. That is, you can’t safely “grow your money” in the current world-wide economic and stock market environment.
So instead, you have to “protect your money” in the current economic and stock market environment.
You need to take control of your company retirement plan principal now. If you own a mutual fund or funds that have not performed well over the last few months, it needs to be sold. The proceeds should be placed in the money market now.
Don’t make the same mistake that individual company 401(k) retirement plan participants made in the early stages of the last great stock market decline in August of 2008.
That mistake was to think that stocks were “on sale” and that the drop in the stock market was a “buying opportunity.” That did not happen, and this stock market drop could fall into the same category.
Leave the “sales” for Black Friday. Nothing in the stock market mutual funds in your 401(k) is on sale now.