The stock market was supposed to climb steadily and provide all forward-thinking Americans with sufficient funds for comfortable retirement years. Sure, savvy investors expect a few valleys in that upward trend, but most have come to believe, over years of a strong economy, that the market would multiply their savings and that little risk was involved. Those who hadn t paid close attention to their statements over the past few quarters received a rude shock when they opened their year-end statements and discovered that their retirement accounts were, on the date of the statement, worth considerably less than they d expected. Investment advisors say that it s important to remember that a statement is a picture, just a snapshot taken at a particular moment, rather than a comprehensive analysis of the long-term performance of a stock or mutual fund. Now is certainly not a good time to bail out.
Many employers make it very easy to save for retirement through payroll deductions.
It s sent off to an investment firm, usually a very large corporation, where it s invested in a manner determined by the employee during a short meeting that might have taken place several years ago. When opportunities are presented to revise that investment strategy, employees may assume that their employer and the investment firm are looking out for their best interests. The market s antics during the latter part of 2000 and the first few days of this year should have convinced investors that they d better be paying attention, though. While losing everything isn t all that likely, it s certainly possible. It s also possible that investors will need access to their funds before the market recovers.