Everything You’ve Ever Wanted To Know About 401(k) Plans

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You shouldn’t base your investing strategy on current events too much

“In a lot of ways, good investing is about focusing on the long term and not trying to worry too much about what’s going on in the short term, Royal explained. “You want to have a strategy that fits you for the long-term. In general, when stocks are down, you want to buy them. If you use something like the rule of 100 to figure out what your allocation should be, well what happened in the most recent market dip is that bonds didn’t really do a whole lot. They kinda just a flat like they normally would. I mean there were down a little bit but they kinda just stay flat, but stocks really really dipped, at least for a while. So what an allocation rule like that would allow you to do is say, ‘Oh, look hey my allocation to stocks is way below where it should be and I need to shift some money from bonds to stocks. So by picking an allocation like that in sticking to it, it helps you buy stocks when they are cheaper and how to sell them a little bit when they sort of go above.”