The Financial markets are taking a beating and our savings are showing off the bruises. Last week I mentioned we opened our youngest son’s 529 account. It’s value is already down 4%. Ouch!
My husband has come home from work every day asking if I have looked at the value of our portfolio. I always have to remind him that: we are in it for the long haul. Both our retirement and college savings have more than 15 years to go before we need to tap into them. So although a little distressing we shouldn’t worry about day to day swings in the markets, as long as our portfolio is balanced.
A few months ago I revised the asset allocation in all of our accounts. We were heavily invested in stocks with very little in terms of bonds. Although we gave up a little bit on terms of potential portfolio gains we also protected what we have by being more conservative in our asset allocation. I also did the same with our sons’ 529. I am glad I did that because I also noticed that if we have stayed with the fund we were invested in before my son’s 529 would be down almost twice as much.
It’s very easy to get spooked by the way the markets are doing. But I find the best way to deal with it is by really just closing your eyes and sitting tight for the whole ride. I plan to ignore the daily ups and downs. It will be hard but at this point the best we can do is actually save more, buy when it is cheap and be confident on the asset allocation we have.