Sticking with the Program

It gets harder and harder to just keep putting $1025 into my rapidly-dwindling 401(k) each month.

Intellectually, I understand that this is exactly the program I must maintain throughout our recession.

Emotionally, not so much.

But it helps to have Money Magazine on my side. In particular, I liked this response from senior writer, Janice Revell to a question by a similarly concerned reader. It helps to know that "in scary markets you tend to underestimate the risk of being out of stocks. In the long run - and that's what you care about - the risk of missing the upside poses a graver threat to your wealth than taking hits on the downside does."

Elsewhere in the December issue (but not online that I can find), the "Mole" (a regular columnist) writes, "Risk tolerance ebbs and flows. From 2003 to 2007, U.S. stock prices nearly doubled and international shares nearly tripled. During such good years, you tend to believe that you have a high tolerance for risk. At times like these [i.e. the current stomach-churning market], your willingness to take chances drops sharply."

No kidding!

I am squarely in the crowd these articles are addressing--I always thought I had a high tolerance. And for the time being, I'm hanging in there. But it's hard to keep the emotions out of the program.