While you guys are looking at your beaten up 401k this weekend, you may be asking yourself what should I do now???
I did an exercise that helped me out....Here it is.
Add up the sum total of all your assets in stocks and stock mutual funds.
Then divide that by 50% and ask yourself if you can stomach another 50% decline in the value of your stock portfolio... Is this going to significantly reduce your quality of life?? If you are gainfully employed and have a longterm time horizon then it should not and you should stay the course...
If you just can't deal with another 50% decline then bail.
I did an exercise that helped me out....Here it is.
Add up the sum total of all your assets in stocks and stock mutual funds.
Then divide that by 50% and ask yourself if you can stomach another 50% decline in the value of your stock portfolio... Is this going to significantly reduce your quality of life?? If you are gainfully employed and have a longterm time horizon then it should not and you should stay the course...
If you just can't deal with another 50% decline then bail.
