Monday, June 22, 2009

Go ahead, open your retirement statements


On Mondays, we answer questions on our blog from readers. If you have a question for us, we'd be happy to answer it. Please post it in the comments section or e-mail robynsekula@sbcglobal.net.

QUESTION: Out of fear, I haven’t been opening my retirement account statements for months. It seems that the market is recovering some, though. Is it safe to open them now?

ANSWER from Dan Danford: The stock market is better now than it was earlier. The Dow Jones Industrial Average hovering around 8600, up from a low of 6400. If you owned stock funds in your 401(k) mix, the statement probably looks better today than it did several months ago. Even so, it still looks considerably worse than several years ago when the market topped above 14000! Short-term market swings are virtually unpredictable, so your best long-term bet is to build a diversified portfolio - both stock and bond mutual funds - and ignore the blow-by-blow media reports. Open the statements once or twice a year, then toss them. Your goal should be to maximize returns until and after your retirement date. Forget the weekly, or even yearly, fluctuations and you'll be prepared when the time comes.

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