Olde Hornet
Well-Known Member
Vanguard - Education
retirementplans.vanguard.com
After nearly ten years of steady gains, the U.S. stock market dropped almost 20% at the end of 2018.* Such a drastic drop could tempt any investor to throw in the towel and dump their stocks in favor of less risky options—like bonds or cash. But a rash decision may cause you to miss out on hefty gains should stocks suddenly rebound.
So how can you defend yourself against market volatility? The best defense is to own a mix of stocks and bonds that you’d be content to hold whether the markets go up or down—as the markets will and in no predictable order. Then, just stay put.
Check your mix
It’s a good idea to make sure the current mix in your retirement plan is one you’d be comfortable holding for the long run. You can check your mix—and make changes if needed—by logging on to your account at vanguard.com/retirementplans.
Need some help?
If you’re not sure what your mix of stocks and bonds should be, take Vanguard’s Investor Questionnaire. We’ll suggest an appropriate mix for your age, time until retirement, and tolerance for risk.
Or, if your plan offers them, you could invest in a target-date fund. These funds provide a professionally maintained investment mix that shifts its emphasis from stocks to bonds as your retirement year nears. That means you don't need to readjust your mix annually—although you can if you want.**