How to protect your money and even make some in this roller coaster stock market
HOUSTON – Don’t look now, but your 401k has likely lost quite a bit of money since last week. Coronavirus concerns are causing some crazy fluctuations on the stock market, but it’s not all bad news. Financial Advisor Richard Rosso with RIA Advisors says there are ways you can make the down market work in your favor. First, he’s answering some of your questions.
Should I take my 401k out before I lose more money?
Answer: If you are 10 years or more away from retirement, leave your 401k alone. Don’t touch it. This investment is intended to be long term. You will lose money in market fluctuations like we’re seeing now; but over the long term, you will make money.
On the other hand, if you have less than 10 years before you will need the money in your 401k, you don’t have time to lose a lot of money and wait for the market to rebound. Don’t take everything out of the stock market. Instead, lower the amount you have in stocks to just 20 to 30% of your money.
Ways to make or save money from the down economy
- If you have some money to invest, this is a good time to buy some stocks at very low prices. You can invest online with no fees by opening a Fidelity or E-trade brokerage account for free. They both have apps to help you manage and track your investments. If you do invest this way, Rosso says you should buy big-name companies and plan to hold them, not cash them out quickly.
- Mortgage rates are at a record low of 3.29% right now. That has a lot of people rushing to refinance. This is a great time to do that, but be warned so many people have pending applications that now some lenders are advertising higher interest rates to slow down the demand for new mortgages and refinancing. Definitely check with your lender or your bank if you want to lower your mortgage interest rate right now.
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