Ailing stock market helps 401k investors - WALB.com, Albany News, Weather, Sports

Ailing stock market helps 401k investors

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After devastating losses in the stock market, Wall Street showed slight signs of improvement Tuesday.

The Dow rose 4% to close at 11,239.

On the heels of the nation's credit score being downgraded to a AA+ rating and a stock market plummeting to a low for the year, many Americans are worrying about their 401k and retirement plans.

Here's some good news.  With the stock market in the dump, it's actually a great time to invest.

"You're in the accumulation period of your lifetime. You are building up assets for retirement. When the market goes down like it's done lately, if you think about it, this is an ideal thing to happen for a long term investor. This is actually good," said Wells Fargo's Vice President of investments Vic Sullivan.

Sullivan says accumulating assets while the market value is low is the perfect situation for investors.

Sullivan explained how the market crash of March of 2009 was an investor's dream.

"Would you rather the market be sky high through all your years of working and buying and accumulating at a real high level or would you like to have the market down for a while and let you accumulate when the market is at a better value? That's what we got right now," said Sullivan.

Sullivan does have some tips for those who are weary of their 401k plans in this market.

"Have a properly diversified portfolio. You don't need to be overly in stock if that doesn't suit your needs, your investment style, risk tolerance or your time frame. A good 401k will give you a wide variety of investment options, not all of them will be in the stock market."

Sullivan went on to say the best thing for young people to do now is to invest in a 401k especially in this economy. The younger you start to save, the less you have to worry about in the future.

Financial experts say when starting a 401k investment understand what you are investing in. Many investors lose money because they don't know exactly what they are putting their money into.

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