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You would naturally think that in times of economic turmoil, especially with decliining and fluctuating stock markets, that it would be prudent to take a conservative attitude towards your 401-k or other retirement vehicles.

You would be right.

Conserve is the name of the game.

Should I Sell My Stocks or Mutual Funds?

To this question, I say – NO!

The reason is that you bought them over time at a generally higher price than they are currently worth. BUT, you haven’t actrually lost anything UNTIL you actually sell them. Then, yoiu are selling them at a loss which you won’t ever recover.

The traders are the ones making money in these days. They aren’t any smarter than we are, they just do it for a living all day long. You have the advantage of being able to hold onto your investments for a long time – years, not hours. I’m pretty sure we’ll see the end of this Recession or even Depression. And when it ends, the stock market will recover. Sure, a stock here and there will disappear, but who can predict that?

What I can predict is that if you Sell now, you’ll sell at a loss and you won’t get it back.

Should I Quit Contributing to My Retirement Fund?

Again, the answer is NO!

Currently, most all stocks in the market are “on sale”. The secret to making money in the stock market isn’t to not invest, but to invest and stay invested.

Since stocks are on sale, you get more shares for the same amount of money. When the market recovers, you will reap a larger profit than if you stayed on the sidelines. When something good is on sale, it is good to buy lots of it.

Besides, most companies have some sort of matching percentage for your contributions. That’s free money – a raise in times when jobs are vaporizing. If you don’t participate, you don’t get the money.;l

What Do I Do?

My advice is to FREEZE! Don’t do much of anything right now.

Don’t stop your 401-k contributions, Increase them. Certainly don’t try to re-balance your holdings right now. (You can re-balance your contributions, not your holdings.) Don’t sell anything, but be prudent and keep buying now while stocks are on sale for you.

In 5 or 10 years, you’ll look back on this time as one of the best opportunities you had to improve your financial condition. Don’t let it pass you by.

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