Go beyond a basic 401(k)

Go beyond a basic 401(k)

Give your employees more than just a 401(k), join the movement.

5 min read

Charting a Prudent Path Through Market Volatility

David Ramirez
December 13, 2018
Charting a Prudent Path Through Market Volatility
Table of contents

We’ve had a great bull market, but it hasn’t been a smooth ride

It’s been such a great run, it’s easy to forget the significant bumps along the way. In fact, since the 2008-2009 recession, the total return for the S&P 500 was 336% from it’s low point on March 16, 2009 to November 30, 2018.

But it hasn’t always been smooth - there have been 5 significant market declines worth noting during this bull market:

  • Flash Crash of 2010: The Dow Jones declined 9% within minutes, to recover most of their losses by end of day.
  • Black Monday 2011: The S&P 500’s worst day since 2008, it declined by 6.7%
  • Summer Crash of 2015: The broad stock market declined 10%
  • 2016 Selloff: The average stock was down 25% in February, with the S&P 500 down 14% for the year
  • February 2018: The Dow and S&P 500 both fell 10%

Investors that stayed the course have historically been rewarded

A bumpy ride is not new or abnormal. In fact, in 21 of the past 38 years, the S&P 500 had an intra-year drop of 10 percent or more. Investors that stayed the course and did not move to cash in each of these downturns were rewarded handsomely as the market ultimately rebounded and rose to new highs. Those that panicked and moved to cash, frequently locked in their losses.

Our recommendation...

We believe the single best strategy for most people is to stay invested in a risk-appropriate, diversified portfolio. One that balances growth from stocks with the relative safety of investment grade bonds. One of the easiest ways to achieve a balanced mix for your age is the Vanguard Target Date Funds. These funds will automatically rebalance your account for you, given your age and time to retirement. Best of all, as you get close to retirement, they will gradually reduce your risk for you.

Go beyond a basic 401(k)
Give your employees more than just a 401(k), join the movement.
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About Author -
David Ramirez

David Ramirez, CFA, is a recognized 401(k) expert with over 20 years of experience in 401(k), ERISA, cash balance plans, and ESOPs. A UC Berkeley graduate, he played a pivotal role at Financial Engines, a 401(k) advisory firm founded by Nobel Laureate William Sharpe, Ph.D., where he was a portfolio manager who helped manage over $50B in 401(k) assets.  His clients included some of the largest Fortune 500 companies and state governments.

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This material has been prepared for informational and educational purposes only and should not be construed as a recommendation by ForUsAll, Inc., its affiliates or employees (collectively, “ForUsAll”)  to activate a cryptocurrency window or invest in crypto.  Investing in crypto can be risky and investors must be able to afford to lose their entire investment.  You should consult with your own advisers before activating a cryptocurrency window or investing in crypto.  ForUsAll does not provide legal, tax, or accounting advice. Please refer to your Plan's fee disclosure for more details.© 2023 ForUsAll, Inc. All rights reserved.
1 Schwab 2022 401(k) Participant Study - Gen Z/Millenial Focus, October 2022.
2 As of 12/31/2022. Employees include both current employees and terminated participants with a balance.
3 "Morgan Stanley At Work: The Value of a Financial Advisor" Morgan Stanley, March 2022.
4 Sarah Britton was a client when she provided this testimonial through an independent third party review website. She received no compensation for her remarks. There are no known conflicts of interest in the provision of her comments related to the services provided.