Featured in: ThinkAdvisor
Most 401(k) investors very rarely trade, even during times of market turbulence. For instance, Morningstar found that fewer than 6% of 401(k) participants made any changes during the market crash in March 2020.
Since 401(k) plans are designed to have automatic investing, the good part is that most investors will keep buying throughout the bear market. This will help their long-term performance.
For the few 401(k) investors who want to make a change, it’s important to remind them that they are long-term investors. They can expect to live through many bear markets and recessions throughout their career. Each one will feel uniquely terrible, but staying the course is the best strategy since the market has come back 100% of the time.
— Shane Sideris, CFA, managing partner, Synchronous Wealth Advisors in Santa Barbara, California
