Everyone’s talking about the financial crisis, exchange traded funds (ETFs) and what’s to be done about it.
Americans’ retirement plans have lost as much as $2 trillion over the past 15 months. And while Money Magazine points out that it’s okay to feel afraid, it’s a little less okay to make decisions based purely on it. Any decision you make now could have a long-term impact, so it’s important to be rational.
Two things are important to note: don’t stop contributing to your 401(k) just because of the crisis, and if you’re a buy-and-hold investor, you don’t necessarily have to sit back and take these steep losses. If it would make you feel more comfortable, it’s all right to see one-third of your portfolio and just get back in when the trends are once again up.
The Federal Deposit Insurance Corporation (FDIC) has also taken measures to protect bank accounts by temporarily increasing the limit for insurance from $100,000 to $250,000 per depositor. This will remain in effect until Dec. 31, 2009. The coverage for retirement accounts remains the same, at $250,000.