If you have a 401k plan, you invested in the stock market. In 2008, many Americans saw their investments suffer. Some individuals lost most of their retirement due to the poor stock market and troubling economy. There wasn’t much that investors could do, as the economy just hit a wall. It was trouble all around. With that said, there are some ways to protect your 401k investments, namely stocks. For starters, be sure to diversify. Don’t rely on one industry to retire, rely on them all. Next, use the internet as a research tool.
As great as it is to hear that the internet can be used as a research tool, you may want more information. Why? How? Please continue reading on to get your answers.
As previously stated, the economy took a hit in 2007. Many stocks dipped to dangerously low levels. If you read or watched the news, you were slightly aware this was coming. Many signs were shown. In fact, you may have had the opportunity to switch a few of your high-risk stocks to safer bets or bonds before the collapse started. If not, you suffered a loss. There are steps you can take to prevent that from happening again. For now, try to ride out the storm. Then, be sure to listen to financial news. Remember there were small signs that the economy was in trouble, long before we realized it was.
The internet can also be used to research individual stocks and companies. If investing in your 401k for the first time, use it as a valuable research tool. In fact, combine the internet with a financial expert. That expert can give you ideas on companies with profitable stocks or stocks in which you are likely to profit from. Now, don’t just rely on the advice of a financial expert alone. They have been wrong before. Take the information your financial expert gives you and return home. Use the internet to your advantage. Research the long-term history of stocks and their projected outlook.
You can and should also use the internet to monitor the stocks you have. Most companies show signs of trouble before their stocks dip or the company goes under. This is and was most apparent with Circuit City. This well-known electronics retailer once competed with Best Buy as the best electronics store in the United States. On January 10, 2009, Circuit City was told they had one week to find a buyer. If that isn’t done, their doors will close. At one time, around January 2007, Circuit City’s stocks were at about $20 a share. Now, they are lucky to be above .25 cents.
Those individuals invested in Circuit City stock are likely to lose money, especially if the company does go under. However, those who turned to the internet were well aware of a problem. Many were able to pullout before the company’s stock started a downward spiral. There were internet reports online that Best Buy was becoming the top electronic retailer. This automatically meant Circuit City was slipping. Next, it was easy to find postings from former employers terminated from the company. You may have let this slide as rumors from disgruntled employees, but the total was in the thousands. Thousands of well-paid and experienced workers were laid off and replaced with inexperienced, low-paid workers. Why the drastic step? They were losing money and needed to cut expenses.
Circuit City is just one example. Regardless of the company or industry, whether it be retail, food, auto, financial, or technology, it is easy to find information online. You can use that information to influence your 401k investments.