Thin(k) About Your 401(k) Plan – Should I Stay or Should I Go?…This Market Is Hard To Handle!

With the recent market volatility, clients have asked me whether they should “stay in the market,” “sell,” “buy more” or “change my allocation.”  In fairness, these questions come up all the time, but especially when the market is down.  These feelings are a part of human nature.  In fact, I wrote about this subject in November of 2020 – not too long ago.  What I wrote then holds true today.

I have watched the market soar incredibly and also some very fast declining days.  Other times, it seemed like we were going sideways for what felt like years.  Anyone who tells you that they can predict consistently and with certainty what the market will do in the short-term isn’t being truthful.

At ThirtyNorth Investments, we help clients bring together money and meaning.  We believe that our best chance to succeed in this mission is to understand each client’s ultimate goal for their money.  That way, we can do our best to plot a course to reach that goal and help our clients avoid the temptation to bet large on the current “winner” being touted in the financial press.  Or we help avoid the other big temptation to get in and out of the market in an attempt to only be invested during the good times.  Both of these strategies are fraught with peril, which brings me to another of ThirtyNorth’s core principles.

Discipline is Everything – While many investing strategies and philosophies have merit, it is an investor’s ability to stick with a strategy that ultimately leads to success.  Attempts to chase recent performance are generally unsuccessful and result in more trading costs and taxes.  We believe that discipline and patience to follow a well-researched strategy rewards investors over the long-term.

Follow this link to see our other Investment Principles.

We are living through one of those times where I believe being disciplined is critical.  If you look at a long-term chart of a broad stock market index, you will see that in spite of significant pull backs, the market has grown.  Living through those pull backs will always be hard, but necessary.  The chart below shows the Russell 3000 Index going back five years and it tells the story.

The Russell 3000 Index is a capitalization-weighted stock market index that seeks to be a benchmark of the entire U.S stock market.

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