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We are a fee-only financial planning practice, providing financial advice by the hour to folks from all walks of life.
2 people found Jim's answers helpful
2 out of 4 people found this answer helpful
Unless you're retired or just about ready to retire, this should mean nothing to your 401(k), other than
Unless you're retired or just about ready to retire, this should mean nothing to your 401(k), other than that you may see a higher balance in your 3rd quarter statement as a result of the recent increases.
Short-term fluctuations occur all the time in the stock market, and they have little if anything to do with your investment strategy - especially if you have a long-term objective for the investments. Under the assumption that your 401(k) is to provide you with funds to live on in your retirement, this means that you need to plan your strategy to provide for growth over 30+ years from the date you retire.
Reacting to short-term activities (record highs in the stock market, 10% corrections, etc.) will not improve your long-term investment results. Choosing an appropriate asset mix for your risk tolerance and then sticking with your investment plan through thick and thin will yield the best possible results for you.
On the other hand, if you're retired now or just about to retire, you should not have the money that you need to live on (for the next 2-3 years, for example) invested in the stock market and thus subject to risk. Set aside the funds that you'll need to draw on in a safe place, such as a money market account. Then the remainder of your nest egg has time to weather any adverse activity in the market, and you'll be able to sleep at night and ignore the financial headlines.
Jim Blankenship is the founder and principal of Blankenship Financial Planning, Ltd., a financial planning firm providing hourly, as-needed financial planning and advice. A financial services professional for over 25 years, Jim is a CFP® professional and has earned the Enrolled Agent (EA) designation. Jim is also a NAPFA-registered financial advisor, which designates him as a Fee-Only Financial Advisor.
Prior to establishing his independent firm, Jim operated a successful tax preparation service; he also managed information technology operations for a major financial services corporation. Jim is a member of the Garrett Planning Network, a nationwide network of fee-only advisors, founded by nationally-known Sheryl Garrett.
Jim got into this business when his search for an objective financial advisor proved fruitless. It turns out that there were no objective financial advisors in Central Illinois who were willing to work with someone of modest means. Always a do-it-yourselfer, Jim began working to expand his knowledge in order to manage his own finances. As the quest for knowledge evolved, he discovered that he was not alone in the search for objective financial advice — many others want and need the same kind of objectivity and knowledge that he was developing — so Blankenship Financial Planning was launched.
Jim believes that professional, unbiased financial advice is something that all Americans need, at least periodically, to build the brightest financial futures. Holding to this philosophy, Jim is proud to offer high quality, professional financial advice to people from all walks of life.
*Financial Advisor Disclaimer:
IRS CIRCULAR 230 NOTICE: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. tax advice contained in this communication (or in any attachment) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed in this communication (or in any attachment).