I was recently asked by US News & World Report about what 401(k) participants should do when we experience volatility in the markets – like this past January. It made me think about what makes participants uneasy in these topsy-turvy markets. Clearly, it’s fear. Fear is at the root of our reaction to volatility – it’s the emotional reaction to a specific source of danger. Studies tell us it takes just a tenth of a second from the time you’re exposed to something you fear until you react. It’s survival instinct. It’s knee-jerk.

In volatile markets, participants experience fear. It’s at those times that we need to stress the enhanced purchasing power of your dollar in a down market, the immediate return on investment that results from an employer match – and discourage participants from reacting instinctively to fear. A key is to get participants thinking more long-term and providing them with a personalized solution to reach their goal.

Opposite reactions to fear are assurance, calmness, confidence, and trust.  A personalized solution can provide all those things. To read the article ‘Keep Volatility From Hurting Your 401(k) click here:  http://money.usnews.com/investing/articles/2016-03-18/keep-volatility-from-hurting-your-401-k

About Joe Reese view all posts

Joe is is an Institutional Retirement Consultant for Unified Trust Company, serving and overseeing the the Midwest and West Coast Territories of the United States.