Perseverance - Don’t Panic!
By Jim Matheu, Retirement Services Manager
Last year at this time the world felt the initial impact of COVID-19. It stretched on for months and continues to this day. In last year’s first quarter newsletter published April of 2020, I penned an article entitled “Take a Deep Breath and Don’t Panic.” When I wrote that article the stock market was in disarray. As noted below, the Dow Jones Industrial Average, S&P 500, and Nasdaq each lost roughly one-third of their value from February 14, 2020 through March 20, 2020.
- Dow Jones Industrial Average February 14, 2020: 29398
- Dow Jones Industrial Average March 20, 2020: 19174
- S&P 500 February 14, 2020: 3380
- S&P 500 March 20, 2020: 2305
- Nasdaq February 14, 2020: 9731
- Nasdaq March 20, 2020: 6880
In that same article I detailed similar market struggles extending from 1962-2018. Refer to that article for timeline of key events.
Despite these struggles from 1962-January of 2020 the three major indices performed as follows:
- Dow Jones Industrial Average…7-8%
- S&P 500………………………...........10-11%
- Nasdaq (Began in 1971)………....11-12%
Our recovery from the pandemic has riveled or exceeded recoveries from previous events referenced above. As of this writing, the Dow Jones Industrial average is at 33,850, the S&P 500 is at 4,196 and the Nasdaq is at 14,060!
The impact felt by your Vista 401(k) Plan has been even more dramatic. In March of 2020 it fell to an intra-day low of just under $200,000,000 and today, April 29, 2021, it is at $309,209,563. In short, the Vista 401(k) plan on the whole has experienced growth in the last year of roughly 50%! That is a remarkable number and serves as a testament to the resiliency of our country, the stock market, and the Vista 401(k) plan!
This last year also served to reinforce a lesson learned following all significant market declines. A lesson that is straightforward but sometimes hard to follow in the face of a plummeting stock market:
“Don’t panic and continue uninterrupted contributions to your Vista 401(k) plan.”
In depressed markets, you purchase more shares at a lower cost and leave your account well-positioned as the market recovers. If you have done so over the last year, or even if you have not, this would be a good time to reevaluate your risk tolerance. Perhaps you were invested too aggressively and the dip in your portfolio caused unnecessary angst. Maybe you were invested too conservatively and did not benefit from the rebound.
Either way we suggest that you visit the Vista 401(k) website and choose the section entitled “Investment Risk Profile” which can be accessed by clicking here: https://www.vista401k.com/learning-center/401k-tools/investment-risk-profile/
This link will ask questions and from your answers, it will help you determine your risk tolerance. You may then, if you choose, realign your portfolio so that your investments better reflect your risk tolerance. This may bring you peace of mind when the stock market experiences future turbulence.
In addition using the Risk Assessment tool, you may want to take advantage of one-on-one financial education available to Vista 401(k) participants at no additional cost to you. This service is offered through Cerity Partners, an independent Registered Investment Advisory firm. You may contact Cerity Partners through FBMC’s Retirement Services department by phone at 866-325-1278 or by e-mail at email@example.com to set a meeting with a financial coach. This coach will help you understand your Vista 401(k) investment options, answer your questions, and help you make sound decisions about your retirement account.
If you have any questions or wish to discuss your Vista 401(k) account, you may also contact the Retirement Services Department at (866) 325-1278 or e-mail us at 401kvista401k.com.