Handling Market Declines
Posted On: May 13, 2022

Dear Sheet Metal Workers Local 3 401(k) Participants,

Market volatility, especially meaningful selloffs, are unsettling to most of us. Here are a few reassuring facts to help you keep a positive perspective and some precautions that may reduce your risks. 

Things to remember: Historically, stocks have gone down faster than they have gone up, but they also went up more frequently than they went down.  Over time, the market has gone up in in 70 percent of the years measured. Throughout nearly the last century, stocks, as measured by the S&P 500 index, which comprises America’s 500 largest publicly traded companies, have yielded an average return of 10 percent annually.*

Things to do: To ride out the storm well, focus more on your goals than the current news. Try not to react emotionally; investors trying to time the market by jumping in and out of it run the risk of selling low and missing periods of exceptional returns. While past performance is not a guarantee of future results, most financial experts recommend adopting a long-term strategy when investing in the stock market.

Turbulent times are a good reminder, however, to review your plan regularly. Consider how well it fits your investment time frame, your need for growth and the level of risk you’re willing to take. Is your portfolio diversified adequately? Spreading investments over a variety of classes, assets and markets won’t guarantee you won’t incur losses, but it should limit them. You may want to make plans now to rebalance some of your holdings when the time is right, or you might view a downturn as an opportune time to purchase some investments at reduced levels.

We do encourage you to make regular contributions to your retirement plan. Investing a fixed amount of money at regular periods through payroll deferrals, over the years, will allow you to buy more shares of each investment when prices are low and fewer when they are high. Using this technique, your average purchase price should be lower than the average market price over the same period.

You have access to a diverse mix of investment options inside your Sheet Metal Workers Local 3 401k plan through Nationwide.  This includes stock, bond and specialty mutual funds, target date funds, and a fixed account that is called Nationwide Fixed Select, which currently, has a fixed rate of 1.33%. 

Attached is an article from a well-respected mutual funds company, American Funds, that provides some additional perspective on how to handle market declines. 

Please call our office at 402-502-5700 if you would like to set a time to meet and review your 401(k) account or review any other aspect of your financial plan.  We are happy to make ourselves available. 

Best regards,

Matt Peters                                          Clint Eikmeier

E: matt@twealthpartners.com            E: clint@twealthpartners.com

*https://www.nerdwallet.com/blog/investing/average-stock-market-return/


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Contact Info
Sheet Metal Workers Local 3
3333 South 24th Street
Omaha, NE 68108
 

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