I’ve been in the retirement plan business for 26 years and I’ve been through a few recessions in that time. There was the dot-bomb implosion, added by 9/11. Let us not forget when our entire financial system was on the verge of collapse in 2008.
While the market is going through a correction, participants and plan sponsors panic. Panicking is a mistake. When participants panic, they switch equities for fixed income and lock in their losses. Plan sponsors panic and decide they no longer want a 401(k) plan.
Markets are correct and that’s the nature of things. There are lows and highs, it’s not a consistent lineup. Whatever you do, don’t panic, and don’t let participants panic.
