bigstock_Business_Success_3954863Up until this sum­mer, mar­kets (espe­cial­ly the Unit­ed States) had been on a steady increase for over 3 years. It was a great time to be an investor and the con­tin­ued climb brought opti­mism, eased the fears of the Great Reces­sion and encour­aged new investment.


Now with mar­kets in an offi­cial cor­rec­tion, the fear is back and opti­mism has dis­ap­peared fast. Inter­est­ing­ly enough how­ev­er, this may actu­al­ly be a bet­ter mar­ket for that new invest­ment if you can brave the head­lines. You may be ask­ing your­self this question:


“Since my cash flow is so tight, should I continue to contribute to my 401(k) in these challenging times?”


The answer is simple…yes, you should. And here is why:


  • Con­sid­er that each dol­lar not put into a pre-tax retire­ment plan is sub­ject to fed­er­al and state tax­es. A dol­lar saved in a retire­ment plan is a dol­lar earned, a dol­lar saved out­side a retire­ment plan may only be 80, or even 60 cents earned depend­ing on your income lev­el. I’d rather take my chances with the mar­ket than lose 20% to Uncle Sam right from the start.


  • Many com­pa­nies out there are con­tribut­ing some kind of match toward their employ­ees’ retire­ment sav­ings. Often this is done dol­lar per dol­lar up to some lev­el. Let me be clear here, “THAT IS A 100% IMMEDIATE RETURN ON YOUR DOLLAR!” You can even afford to have a lit­tle cred­it card debt if your con­tri­bu­tions are being matched. Put in at least up to the match­ing thresh­old, where the mar­ket can take 50% and still leave you with what you start­ed with.


  • When we have cor­rec­tions, stocks go down. This is the per­fect time to invest…you are buy­ing low so you can even­tu­al­ly sell high! When news of the cor­rec­tion end­ing leaks, so does the return poten­tial. Get in ear­ly and your brav­ery to test the tepid waters is like­ly to be rewarded.


Hav­ing a ground­ed finan­cial plan and invest­ment strat­e­gy will also help answer the ques­tion above. Emo­tion­al deci­sions are often made with haste and are not always the best deci­sions. When a map has been drawn, it is quick­er and eas­i­er to find a des­ti­na­tion. This also stands true for our finan­cial well­be­ing. By stick­ing to a plan and mon­i­tor­ing the suc­cess of their lives, not their invest­ment accounts, peo­ple are using the recent cor­rec­tion as an oppor­tu­ni­ty. The reward of this will ulti­mate­ly be reaped in the future.


Our goal at Mack­ey Advi­sors™ is to posi­tion our clients to have an incred­i­ble life regard­less of their asset lev­el; how­ev­er that doesn’t mean pass­ing up a good chance to buy in and be rewarded.