DALLAS — Have you been climbing and climbing and yet you're still at the bottom of the mountain? That's bad.
Especially when the mountain is your 401(k) balance.
And the summit was back many months ago before the stock market fell off into the foothills.
You might feel like giving up, but conventional wisdom says you should keep contributing as much of your pay as you had been before.
That’s because if the stocks that are in your investment fund have taken a beating, the shares you buy after that shellacking are cheaper, so you get more of them.
And hopefully those stocks will go back up in price again. Some even suggest that when the market has tanked you should increase how much of your pay goes to your 401(k).
Of course, that's a very personal decision.
Kiplinger warns that no more than 5 to 10 percent of your 401(k) should be invested in your employer's stock. They say just ask a former Enron employee to understand why.
When you look at the stock chart that shows what happened at Enron, it’s not hard to understand why you wouldn’t have wanted to have a significant portion of your 401(k) funds tied up in the company stock.
No one knows where the market is going from here. But Barron's has access to some bright minds that control big money. Barron’s recently polled them about the stock market.
The publication reports that 112 money managers responded. When asked where they think the market will be in 12 months, the largest share of them were neutral, but the bulls outnumbered the bears by 33% to 22%.
Perhaps more importantly, when Barron’s found that more than two-thirds of those money managers are planning to buy more U.S. stocks in the next 12 months.
If you are planning to rebalance your 401(k) investments, you'll notice your plan may have investment options with terms like Value, Growth, Small Cap, Mid Cap, and Large Cap.
Barron’s reports that more of those money managers believe in the next 12 months, large cap stocks will do better than mid or small cap stocks. And way more of them think that value stocks will do far better than growth stocks.
Who knows if anybody can really predict this market from one day to the next, not to mention a full year into the future -- but it's always good to know what the money manager class is thinking.