Grand Rapids Business Daily

When your 401K fund prices are down is it good to keep putting money in?

I have a target retirement fund for all my 401K money and it's down right now. If I keep adding money does it buy more shares of it so when the price goes up I do even better?

Public Comments

1. If you already have money in, then "stocks are down" 8^( If you're looking to put new money in, then "stocks are on sale" 8^)
2. It is always a great time to contribute to your 401K. Stocks are on sale right now, you get more shares per dollar. Just keep it slow and steady.
3. Buy at the bottom Ever heard of the 2000 crash wiped many out
4. 5 years from now you'll be very proud of yourself! Keep on adding regularly!!!!!!
5. 2008 contribution limits are $15,500 for age under 50 and $20,500 for age 50 and above. http://mutualfunds.about.com/od/retirement/a/2008_limits.htm Increase your contribution as much as you can afford. Having said that you need at least 6 months of monthly expenses including any loan payments saved in cash before you put more money in your 401K. In my opinion, stock markets will stay down for next 3 years due to stagflation caused by oil crisis. So, you have time to increase your contributions gradually if you can not increase them immediately to the maximum.
6. It's never a bad idea to keep contributing to your 401k. If you feel so nervous about the economy or stock market, just keep stocks less than 40% of your portfolio. Try to diversify your investments across a broad class of stocks and bonds. Oh, and don't buy company stock offered by your own employer; if the company collapses, then your savings will be wiped out.