Consider this a propitious time, then, to fine-tune your retirement plan.
"If market volatility forces people to think through their strategy more clearly, it's a good thing," says Jerome S. Golden, executive vice president of the Product Management Group of the Equitable Life Insurance Company. "Consider those investors who have a lot of their retirement funds tied up in company stock options," he says.
"Your net worth can fluctuate dramatically. When the market is volatile, then your net worth is even more volatile. Investors are saying, 'Gee, I cant build my retirement alone on my stock options.' People may need to rethink some of their basic strategies, or to consider whether they had the proper strategy in the first place." The downturn of the market means that for investors who have fewer assets than at the beginning or the year, more sophisticated strategizing is called for.
"If we have fewer resources than 75 days ago, says Golden, "then we just have to look at ways to increase efficiency. It does not mean that one's entire financial plan is turned upside down. A downturn in the market often provides investors with an opportunity to formalize new strategies to get maximum growth out of their retirement savings."