The answer to all these questions is...drum roll please...It depends! I know life changing advice but you get what you pay for and this advice was free. You're welcome!
In all seriousness though, it really does depend. It depends on your goals, your long term financial plan, your age even factors into things here. Let's just run through these options real quick.
Should I sell?
Let me ask you a question. If you bought your house for $100,000 three years ago and today it appraised for $50,000 would you call your real estate agent and list the house for sale as fast as you could? I'm going to guess you're a sane person and your answer is no. Same thing goes with your investments. There is a quote I love by Dave Ramsey. He often says, "You only get hurt on a roller coaster if you jump off." The market is very much like a roller coaster. But do you know what I know about roller coasters? If you hold on tight and stay in your seat, you're going to get one heck of a ride, but you'll end safely right where you want to be! If your long term goals have not changed then neither should your strategy. Hold on Tight!
Should I buy? Probably you should. I like to buy things on sale and that's exactly what you are seeing now. Companies stocks are on sale at really bargain prices. I plan on buying and I think you should too. And here's why. I'm willing to bet in every boardroom of every Fortune 500 company, or any company for that matter, right this second they are making a plan to keep their businesses profitable through this crazy and temporary period in American life. I'm willing to put my cash down on many of these companies. I will bet on capitalism and American ingenuity every single time.
Should I invest more?
Yes. Especially, if you consistently invest. For example you put $1,000 every month in your company 401k in good mutual funds or you consistently invest in your IRA in good mutual funds. Here's why. There is a secret that many investors aren't aware of. It's called dollar cost averaging. Dollar cost averaging is a strategy in which an investor places a fixed dollar amount into a given investment (usually common stock or mutual funds) on a regular basis. The investment generally takes place each and every month regardless of what is occurring in the financial markets. As a result, when the price of a given investment rises, the investor will be able to purchase fewer shares. When the price of a particular security declines, the investor will be able to purchase more shares. More shares equals more money down the road.
I would add one more thing to these options. Should I have a financial plan or hire a financial adviser? Yes. The people that are panicking and selling their investments for losses right now are people without a plan in place and without a financial adviser they trust. This period in time is exactly why you hire a financial adviser.
At 80/20 Financial Services we believe:
"Our goals can only be reached through the vehicle of a plan, in which we must fervently believe, and upon which we must vigorously act. There is no other route to success." -Picasso
We will help you create that plan. So the WHEN the next financial crisis strikes you can lay your head down every night knowing that you and your retirement are going to be just fine. Our mission is simple- In a partnership with each client, we create a personalized retirement plan to help them realize their dreams and achieve their goals. We do this with Reliability, Integrity, Compassion, and Honesty.
Feel free to contact me for any questions you might have about your 401k's, IRA's, Investments, etc. I'm available by phone, text and email. I also have the capability to meet with you online via a video conference. If you are afraid to get out and about right now, this would be a perfect way for us to discuss your retirement options. Talk to you soon.
P.S. Don't jump off the roller coaster.