[masraum]

Originally Posted by MattKellett

ok, my belief with retirement funds is not to change anything!!!!

When I enrolled in my company's 401k about 8 years ago, I decided then how much risk I wanted to take. In those 8 years I have done fairly well, until this last peroid where I dropped 12.3% Now I'm sure I will drop even more this next period, but I am still contributing the same amount into the same funds, and now buying at a lower value, sure it might lose some more money, and if it does I will be buying at an even lower value!!!

Yes. You have a point, but there is also something else to think about.

We'll assume that you have your current investments and they are $100k, the equivalence of 5000 shares of the various investments. The market starts to drop and you loose 10%. At that time you decide to move your balance into something safer that's less likely to drop, or will at least drop a lot less than the riskier stuff that you're invested in now. The market continues to drop for a while and the Dow bottoms out at 7000 from the 11000 high mark it was at. When it gets back up to 7500 you decide to take your retirement money from the safe investment and move it back into the riskier stuff. Lets say that with interest and the drop, the value is still 90,000, you move that money back, but now, your 90,000 that was 5000 shares of the risky stuff, because the market is 20% lower than it was when you sold, is the equivalent of 6000 shares of the various investments. That was a good move and when the market climbs back out of it's hole, you'll likely have made money.

If you leave it where it is, and the market climbs back to where it is today, you won't have lost any, but you also won't have made any either.

Granted, that's probably a bit simplistic, but I don't think it's entirely wrong.