Think Long Term Retirement Planning, Not Presidential Term

The next step in successful retirement investing is understanding you can’t time the market. Fidelity demonstrated the importance of consistent, long-term investing in a one of the worst investing periods in history—the stock market meltdown of 2008–2009.

Their study showed that employees who kept investing in their workplace retirement plans between the years of 2004–2014 ended up with a record-setting average balance of $246,000. Their average annual rate of return was 15% to boot!

Dalbar’s study of investor behavior shows the flip side of that coin. While the S&P 500 had an average rate of return of 10.35% over the last 30 years, the average mutual fund investor’s return was only 3.66%. Dalbar’s data shows that the average mutual fund investor jumps from fund to fund, either in a reaction to stock market changes or in anticipation of them—generally making the wrong decision when they do.

The lesson here is that you don’t want to be an average mutual fund investor. Select mutual funds with a solid history of growth and stick with them for the long haul. Even if history shows that stocks wobble at election time, it’s not your job to try to outsmart the market. That’s the average investor’s game, not yours.

Bottom line: The newly elected White House occupant will affect your retirement savings only to the degree you fail to follow through with your established plan.

Dave Ramsey

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Clergy Financial Resources serves as a resource for clients to help analyze the complexity of clergy tax law, church payroll & HR issues. Our professionals are committed to helping clients stay informed about tax news, developments and trends in various specialty areas.

This article is intended to provide readers with guidance in tax matters. The article does not constitute, and should not be treated as professional advice regarding the use of any particular tax technique. Every effort has been made to assure the accuracy of the information. Clergy Financial Resources and the author do not assume responsibility for any individual’s reliance upon the information provided in the article. Readers should independently verify all information before applying it to a particular fact situation, and should independently determine the impact of any particular tax planning technique. If you are seeking legal advice, you are encouraged to consult an attorney.

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