Financial Advice: Stop Looking at Your 401K

I have this annoying habit of always wondering how my money is doing at every moment in time. You may think I am a fool for describing such an act as “annoying”. Well if my investments were doing good then it would not be an “annoying” experience. The fact that my 401K is down 54% this year is the part that is kicking me in the butt.

Every time I log into my retirement account and see that number, it instantly depresses the mood that I was in the moment before viewing the information. If I was happy before, I am now sad. For the moments when I was sad before viewing it, I am even worse after the fact.

My advice to you? Stop looking at your 401K! It will only depress you. We all know we are in a recession and the market is going to continue to jump up and down every few days in increments of a few hundred. By viewing these poor performing numbers on a daily basis, it can only have two results on you a) You become a very angry person on a daily basis or b) The depression of the losses you are incurring will lead you to make a brash decision to try and fix your portfolio.

Choice B) is something that you do not want to entertain because the second you sell off some of your shares then you are officially taking on that loss. The only option in this situation is to remain optimistic. Every two weeks when I get a paycheck, a specified amount of money is used to purchase both traditional and Roth retirement shares for my 401K plan. These shares are being bought at extremely lower prices than before so the volume in my account remains high.

Madame X over at My Open Wallet wrote about this last month when she was upset with the market gains that coincided with her payday on a Friday, doesn’t everyone want to buy in a the cheapest price? Buy low, sell high, right?

I am 25 and just started my retirement fund 2.5 years ago. I have a ton of time before I even want to contemplate retirement. For those approaching the age where they want to just kick it, I think you are going to have to give it another 5 years for this market to rebound and I believe that it will. Sometimes the best advice is to sit back, do nothing, and just wait it all out.

So go ahead and just forget your username and password for a little bit, when/if the times get better, you can always ask them to reset your credentials!