Tuesday, August 9, 2011

Eyes on the Prize

I’ve lost around $8,000 since last week because of this.

It’s enough to make me want to take all of our retirement money out of stocks and move it to cash. But I know that would be the absolute worst thing I could do right now. I just have to keep telling myself:

Stay calm and don’t panic.
As a somewhat educated investor, I already have a portfolio with a mix of stocks and bonds that cushions my losses during tumultuous times like right now. If I was all in cash, I would have missed out on all the tremendous gains the market made the last year too. And it might be my instinct to lower our 401K contribution for a while, but right now is the time to BUY! Things are on sale right now, and there are good deals to be had! (It’s the stock equivalent of the NM Last Call sale!)

Keep your eye on the prize. What’s important is where we finish, not where we are right now. Because we’re still relatively young and retirement isn’t on the horizon for a long while, the finish line is pretty far off. We’ll have ups and downs along the way. But as we move closer to retirement, we just have to make sure we adjust our portfolio accordingly to create an even safer “cushion”.

So yes, I’m bummed that when I update my net worth calculations for the month the numbers will be down. But ultimately, this blip could allow us to come out even further ahead in the future.  

1 comment:

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