With such volatile market swings, it can be easy to see your 401(k) take a hit and freak out. But remember, your 401(k) is a retirement account, which means it's a long-term investment. "Stay put and ride this out," advised Castro. "Don't check your account every day, as it's very likely going to drop, just as it's very likely going to come back up in the months ahead as the world works to recover from this pandemic." She explains that most people are invested in diversified target-date funds, which automatically adjust and become more conservative as you get closer to retirement (they're kind of like "set it and forget it" funds). If you have a way to go before retirement, don't panic and sell now.
She also notes that investment options in 401(k) accounts are limited. "You can't just invest in any stock or bond that you like, and for most of us who aren't stock analysts, it's not in your best interest to chase returns in industries or companies that seem 'hot' right now," she said. "No one has a crystal ball to see how this will all play out." Resist the urge to try to outsmart the market and put your future retirement money at risk.
If you're able to do so, Castro recommends continuing to contribute to your 401(k). "Now is your chance to buy low so you'll benefit from the eventual market recovery," she said.
