Rebounding market concerns: Market Minute 10.30.09

The stock market has been unpredictable to say the least. When you've seen dramatic changes in ...  More »

The stock market has been unpredictable to say the least. When you've seen dramatic changes in your retirement account, you probably feel the urge to take action, but that may not be the best thing to do. Marie from Risingsun is wondering if she should be concerned about this year's losses in her retirement funds. She's says she understands her investments may have been overvalued to begin with, but she wants to know if she's really out all that cash, or if the value is a true representation of the funds actual worth. First of all, if you're going to use the word "losses" understand that you haven't actually lost anything until you sell out of that investment. Now, how concerned you should be, depends on how close to retirement you are, because you're getting closer to having to use that money. But like you said, there is some truth to your investments having been overvalued. "The market gets overvalued and undervalued at times, but the reality is it all comes down to how much you bought it for, versus how much you sold it for," said David Elrod of Generations Investments. "At the end that's how your account gains or loses money." Elrod added if your accounts lost value this past year, once you sell you really are out all that cash, so just make sure you are communicating with your advisor. "A lot of times when people panic and the stock market drops, they want to sell, even though at this price," Elrod said. "It's now a great price to be owning it." In other words, a chance to get more shares at a lower price.  « Less