Market dips can grab headlines—and attention. But when it comes to your 401(k), it’s important to zoom out and remember what you're really building: long-term retirement wealth.
You may have seen some headlines recently about new trade policies, including a 10% tariff on most imported goods. While this change is making waves in the markets, it's important to remember: short-term volatility often creates long-term opportunity. It also opens the door for strategic investing—especially when it comes to your future contributions.
It’s totally normal to feel a little unsettled when you see your balance dip. But here’s the key: your 401(k) is designed for decades of growth, not daily updates. Staying invested during rocky markets is part of the plan.
We've Been Here Before—and We’ve Come Out Stronger
- In March 2020, the S&P 500 dropped 34% in just over a month due to the pandemic.
- But by August, it had fully recovered—and ended the year up over 16%.1
- During the 2008 financial crisis, the market dropped nearly 50% but recovered within a few years and went on to hit new highs.
History shows that after the worst single-day drops in the S&P 500 since 1950, investors who stayed the course were often rewarded with positive returns over the following 3 months and 1 year. Staying diversified and invested remains a smart long-term strategy 2.
These examples show why long-term investors, especially those contributing regularly to their 401(k), are often rewarded for staying the course.
So, What Should You Do Now?
If the headlines are making you feel anxious, here are a few smart, proactive steps to take:
- Keep contributing to your 401(k). When the market dips, your contributions are buying investments "on sale." Over time, this can boost your overall return.
- Check your allocation. Make sure your investment mix still fits your timeline and comfort with risk. If you’re not retiring for 10+ years, a little volatility now is normal.
- Check in—but don’t obsess. Markets move daily, but retirement goals are reached over decades.
What Not To Do:
🚫Avoid moving your funds into a money market just because the market is down—you could lock in losses and miss the rebound. Timing when to jump back in is tough, and most people miss the best days trying to guess it.
🚫 Don’t pause contributions out of fear. Time out of the market is usually more damaging than time in it.
🚫 Don’t let fear drive the strategy. This plan was built for the long game—and history shows that long-term investors tend to win.
You’re doing the right things—investing consistently, focusing on the future, and staying grounded even when the headlines get noisy.
If you want to walk through your plan or chat about your investment mix, we are just an email or phone call away!
Keep your focus on the future. You’re doing great.
Sources:
1- “One Year Since the Coronavirus Crash: U.S. Market Volatility and Performance in 7 Charts” Morningstar, March 16, 2021, accessed April 07, 2025.
2- "Tariffs 2.0: Implications for Your Portfolio" Kestra Investments Market Commentary, April 3, 2025, accessed April 07,2025.