I am 26 yo and have total $27.5k contributed to my 401(K). I have chosen 2045 Blackrock target date fund and my 2020 first quarter rate of return is -37% due to the current market blood bath. I have lost around 7.5k in the first quarter itself in 2020 and my current balance stands at ~20k. I am feeling very panicky and thinking of moving out my 401k or adjusting my target date fund to a nearer date fund to reduce loses. I saw few other online posts similar to my question but they were having a negative return rate of single digit. Should I take any action right now?

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    2045 meaning you wouldn't need the money until at least that date? personally, i don't even pay attention to how my 401k is doing so i'm not tempted to worry about how it is doing...
    – user12515
    Commented Mar 18, 2020 at 4:01
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    But if you are 26 years old, you don't need retirement money until 2045. Well past that, for a standard US retirement age of 67. Commented Mar 18, 2020 at 13:19
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    I'm a total novice so not posting an answer but would I be mistaken to say that the quickest way this 7.5K is truly lost is if he relocates it? That it's actually not lost, and what it purchased is just temporarily worth less? I expected to see something similar to this in an answer and I don't
    – McAden
    Commented Mar 18, 2020 at 18:43
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    "I am feeling very panicky and thinking of moving out my 401k" - So basically you are saying you want to lock in your loss right now, instead of waiting the perhaps 12 months it will take to recover. In other words, you want to lose the 7.5k now, rather than enjoy the likely $51k it will grow to in 2045.
    – Glen Yates
    Commented Mar 18, 2020 at 19:15
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    If you're 26, your retirement date is 2061, so you could pick an even more aggressive fund than that. If you stay in your 401k right now, assuming you're still contributing, that means you are buying increasingly cheaper shares as the price plummets. Besides, does your employer match your contributions? Mine matches 50% of the first 6% contributed, so that's a 50% gain right there.
    – shoover
    Commented Mar 18, 2020 at 20:09

9 Answers 9


There is not one right answer to this but in my opinion, this is not the time to move to safer options for someone in your position. You are very young and this is a retirement account, you want to continue to put money in stocks because they are going to be VERY cheap right now compared to when you plan on retiring if the market continues as it always has. Yes there will be other times where the market crashes but it will recover. You don't want to sell your stocks and be sitting in bonds while the market is recovering, then not only did you get hit hard by the decline but you missed the upswing.

If you had a crystal ball you would pull all your money out of stocks and throw everything back in when we hit the bottom. If you had said crystal ball you would not need to worry about retiring because you would be filthy rich. I would keep doing what you are doing and look at this as a sale opportunity (the stocks are on sale, not a sale opportunity to sell your stocks) and don't even think about how much your account has decreased by.

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    Definitely this. During 2008, my IRA lost about 60% of its value. I didn't sell because I knew I wouldn't need the money for many more decades. At the end of 2019 (there had been no contributions to that particular IRA since 2007) it was worth about 4x what it had been worth prior to 2008. My only regret was not buying more in 2008. The value of all my retirement accounts has plunged again in 2020 and I since won't be touching any of that money for at least 20 years, I'm looking at this as an opportunity to buy. Commented Mar 19, 2020 at 21:31
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    By sale, you mean buying equities at bargain prices - rather than an opportunity to sell your existing equities (I think). Commented Mar 20, 2020 at 3:37
  • @technogeek1995 That is correct, I have edited my answer to make it more clear. Commented Mar 20, 2020 at 14:43

Moving money out of your 401(K), adjusting your target date, or in general taking measures to stop your losses is very likely the worst thing you could do with this account right now. You should be doing the opposite, putting more money into the account.

You may have heard the phrase "buy low, sell high". The stock market is now low, so it is time to buy, not sell.

Let's say you have 100 stocks right now. If you sell you get $20k, and there's a high chance that by the time you realize the market is recovering that $20k will only buy 80 or 90 stocks, losing 10 or 20 stocks compared to doing nothing. Similar reasoning applies in the opposite direction for buying - you will likely get more stocks if you buy now than if you hold your money back until you're sure the market's recovering, because you will miss out on all the growth that convinced you of the recovery.

You are 26, and this is a retirement account. That means you shouldn't be expecting or planning to use the money in it for anything until over 30 years from now. On that time scale, the current market drop is a barely noticeable minor blip, and the market has far more than enough time to recover. Steadily contributing more money to the account is many times more important and reliable than any attempt to compensate for short term volatility.

Incidentally, I think you actually should adjust your target date - to an even farther one, 2050 or 2055. Funds with target dates like this are designed to work well for retiring - and beginning to withdraw money - at the designated target date, and the earliest you can do that without paying a 10% penalty is when you're 55 years old.

In short, the best thing you can do with this account is to a) keep all the money in it right where it is, and b) put even more money into it.

Having this level of retirement investment at your age is a very good thing. Keep it up with steady contributions, and you should be comfortably well off in your old age. Don't ruin it by letting a short term emotional reaction overrule rational judgement.

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    "The stock market is now low, so it is time to buy, not sell." It's low compared to what it was before. Whether it's lo compared to hat it will be is unknown. Commented Mar 18, 2020 at 22:07
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    @Acccumulation one thing is certain: buying stocks now is way better than buying them last month. Commented Mar 19, 2020 at 12:31
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    Great point about the OP's unusual selection of target date. If the OP is really planning on retiring at age 51, they should have another account that won't incur penalties for early withdrawal. Commented Mar 19, 2020 at 14:49
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    For a US plan including 401(k) the earliest withdrawal without penalty, unless certain hardship exceptions apply, is 59½ not 55. (For Roth-designated, which this OP didn't mention, you must also have been in the plan, or a predecessor, at least 5 years.) At least under current law; last year they changed the former 70½ maximum before RMD (for traditional=non-Roth) to 72, and in the next 30 years they might well change the minimum. Commented Mar 20, 2020 at 15:10
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    @dave_thompson_085 If you are employed at age 55, and then leave your job, your 401(K) from that specific job gets an exception. See irs.gov/retirement-plans/plan-participant-employee/… and search the page for 55.
    – Douglas
    Commented Mar 20, 2020 at 16:12

Before you do anything I would suggest you look at history. This has happened before, and it will happen again. Also, what will happen again is that things will recover. This is an important lesson, stocks do not always increase in value. This is why savings accounts, and debt reduction can be very attractive when compared to stock market investing. However, you will recover and be amply rewarded if you let your money sit.

IMHO opportunities like this do not come along often. This crash has no merit. I expect the recovery to be swift and violent, much like this crash has become. I am looking for every spare dollar I have and investing it in stocks. I bought some stock in both Carnival Cruise lines and Royal Caribbean because they are both excellent companies that have lost around 80% of their value. More people in the US die every month, from car crashes, then will be killed by this virus. The flu kills more people every year. This is unlike the housing market crash of the early 2000's that actually had merit (large number of loans being defaulted).

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    Well I hope you are right, but perhaps limit the bullishness to finance only, and push the predictions of coronavirus outsomes to another Stack Exchange. Even if you are an epidemioligist. I think scientifically it is safer to say that we still don't have enough data to predict outcomes, and some that are numerically viable look very bad indeed. It is fair to say that focusing on worst cases could be driving stock market panic. But I don't think you really have the data to back up the predictions in the second paragraph - it is your own projection of best case results. Commented Mar 18, 2020 at 13:34
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    I voted up because of the first paragraph, but I strongly disagree with the certainty expressed in the 2nd paragraph. Companies like cruise lines and airlines may very well miss an entire year's revenue. Most will eventually come back, but some may fold due to cash flow problems. Given the current situation of Italy I think your optimism about Covid-19 is overstated. If things go well casualties may be less then car crashes, but car crashes aren't contagious, and it's not like we haven't had ongoing expenditures of billions of dollars a year to try to reduce them. Commented Mar 18, 2020 at 18:38
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    “The flu kills more people every year” it’s highly unlikely this virus won’t kill more people than the flu. In the U.K. seasonal flu kills 8k. It’s likely COVID-19 will kill over 25k, as a very optimistic estimate. I think your confidence is incredibly misplaced. This is a dangerous situation we are in, and it’s not going away soon.
    – Tim
    Commented Mar 18, 2020 at 20:44
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    I wouldn't invest in specific stocks right now. Maybe Carnival will recover, or maybe it will go bankrupt and be purchased by Viking Cruises at fire-sale prices. You're much better off looking for a mutual fund that will invest in an industry that's currently got depressed stock prices.
    – Mark
    Commented Mar 18, 2020 at 21:21
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    While initially the market fluctuations may have been "panic", there are now very real consequences as many things shut down to prevent the spread of a virus. Lost wages and revenue will affect the market.
    – Eric
    Commented Mar 18, 2020 at 21:53

That thought is a very common one... but it's deadly wrong.

Your feeling of "OMG I invested and it went down, I should sell" is a very standard response new investors have to the market. And this is what makes them shoot themselves in the foot.

And that's exactly what novices do: they sell after the loss: in other words, they sell low. And when they try to time their buy-ins, they buy when they see CNN crowing about record highs, so they buy high. Is that what they taught you? No.

They taught you "Buy low, sell high".

And yeah, that takes these. If you wonder who you're making money off of when you buy low/sell high, it's people who panic and do the opposite.

But either way, this is called "timing the market". It is widely regarded as bad. Many experts point out that just holding the helm steady, and keep letting your 401K do its monthly buy-ins, actually outperforms those who buy on bad news/sell on good news. The claim is Time IN the market beats timING the market.

I would put an asterisk on that*, but basically, yeah.

Deconstructing that emotion

Your emotional impulse is to get out because it fell. But most people don't really reason it any farther than that; they think that logic stands on its face. But let's delve deeper. Why get out after it fell? "Because it might fall further." Already, that logic is starting to fall apart.

  • Did the American economic engine really lose 37% of its value? Did 37% of our factories evaporate? Not really. Did 37% of our market (jobs) evaporate? No, not even the minimum wage jobs that are taking it on the chin right now have fallen 37%. So no, we haven't lost 37% of anything.

Think about America 1 year after this crisis ends... we'll all be fed up with social distancing and self-isolation, and be chomping at the bit to get back to work and get back to consumer spending. There will be a massive bounce-back as a result.

This kind of whiplash is exactly what happens in recessions.

And that is why it is so smart to pull that seat belt another notch and stay on that crazytrain.

Everybody who got slaughtered in 2008-2009, and stayed in, had regained all their value by 2011, and is doing fantastically right now, even with the latest gut punch. This too shall pass.

A very long bull market, interrupted

We've had an unprecedented decade of economic growth and have been due for a downturn. Looks like this is gonna be it. Usually the downturns are due to the market self-destructing, like the easy credit and subprime loan packaging of 2007 when we found out much of the value was illusionary. But in this case, the crisis is entirely external to the market, which means, the market is basically undamaged.

The foundation of American business is solid as a rock.

The market is ready to do business again, when the crisis abates.

This is echoed in what the experts are saying. I just read a very pessimistic article about Boeing. But even that naysayer said "some airlines might cancel new-aircraft orders". That means the vast majority of airlines still want the new airplanes they have ordered, because they recognize that in 2022-25, they're gonna need 'em.

The foundations of this market are in very good shape. And I am revisiting my various funds and pushing them more in the market.

That said, I'm sorry for your loss, but you'll regain it in a couple of years, long before you retire.

* the asterisk is that the claim assumes steady-state investing. What I argue, is that when brokers are jumping out of windows, that's the time to flip over couch cushions and find extra money to throw into the market that you wouldn't ordinarily invest.

It's also an excellent time to revisit your portfolio and make sure that your asset mix is reasonable. Let's say you're aiming for 80% stocks/20% bonds ($8000/$2000), and stocks get murdered to now you're 66% stocks 33% bonds ($4000/$2000), now's the time to rebalance (buy $800 more stocks to get to $4800/1200). See how you automatically buy low, there? Your 2050 fund will do that too; it's already buying more stocks to rebalance.

  • "But in this case, the crisis is entirely external to the market, which means, the market is basically undamaged. " - unless it turns out that most companies were running with way too much leverage, and they all collapse and new companies form from the ashes, right? There's a common theory going around that the virus popped a huge bubble. In which case: the virus won't have long-lasting impact on the economy; the current market price is closer to the true value of the market; and I wouldn't hold my breath for the bubble to reinflate. Commented Mar 19, 2020 at 12:32
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    "entirely external to the market, which means, the market is basically undamaged." It's amazing how widespread this notion is even though it's complete nonsense.
    – eps
    Commented Mar 19, 2020 at 17:47
  • @eps Since it's so widespread, this seems like an opportunity for you to turn some hearts and minds... so maybe this would be a good time to support your claim. Commented Mar 19, 2020 at 18:23
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    “Did the American economic engine really lose 37% of its value? ” — no. But on the other hand, did the American economic engine really increase 200% in value over the last 10 years? Perhaps questioning this increase is as relevant as questioning the fall from last weeks.
    – spectras
    Commented Mar 21, 2020 at 10:00
  • External? Do you know how many companies are facing losses right now?
    – adjan
    Commented Mar 21, 2020 at 16:27

Yes, you should take action. You should make your regular 401(k) contribution as usual, and invest it as usual. Ensure your company's match is still in force before you do that; if your company is going through a hardship then it's possible they will suspend it, so in that case consider holding off on a contribution until you can confirm a match will be made (but not too long, and contribute anyway if the match is gone for now).

If you haven't rebalanced in a while, and you normally do (and have holdings in more than one fund), rebalance after the volatility calms down, but not during it (as you could lose a huge amount of money in the wrong swing due to transaction delays, and who knows what the right balancing act is right now anyway). (I typically rebalance in the spring, but will hold off until the fall or skip entirely this year.)

Investing for the long term (20+ year horizon meets that definition easily) means ignoring short-term changes, other than possibly rebalancing (meaning, moving holdings from one fund to another to keep a consistent percentage of your money in each fund, to avoid being more exposed than you prefer in one particular area). For the most part, you should only be looking at your statements to make sure there isn't anything you're required to do (such as move holdings from one fund to another if a fund closes up).


I would not suggest you do anything. I know how you feel, and I know it's tempting. But there's really no benefit to making a change.

You have your money in a fund designed to maximize the money you will have in 2045. What you want to do is maximize the money you will have in 2045. No change you make now will recover your $7,500 loss.

Think about it this way -- if you had $20,000 to invest, why would this fund not be the right fund for you? It's professionally managed and it's the right level of aggressiveness for your needs. Nothing has changed that would make this fund no longer appropriate for you.

Yes, you are down $7,500. Nothing you can do now will change that. The fund's logic is still right for your situation. So why move money?

Do you want to invest conservatively for the next 25 years? I don't think so. Do you want to try to personally figure out when to get more aggressive? I don't think so. Let the managers do their jobs.

  • OP is temporarily down $7500 until the market recovers. Unless OP sold low. Commented Mar 21, 2020 at 18:39
  • @Harper-ReinstateMonica Just like everyone else with $20,000 is about to be up $7,500 unless they don't buy the same position the OP has. The OP is identically situated to someone with $20,000, a privilege he paid $27,500 for. That he has an open position changes nothing because anyone with an open position can trivially close it and anyone with a closed position and $20,000 can trivially open it. This loss hasn't given the OP some special ability to profit from the recovery that has some value. Quite the reverse, he only has a $20,000 position in the down market to recover from. Commented Mar 21, 2020 at 18:52
  • Yeah, but that's not what's happening here. What's happening is we have a novice investor who's scared and angry, and is all too willing to step off the elevator at the 20th floor and never step on an elevator again, even though most of them go up most of the time. A fiduciary answer is wrong here, what the person needs is confidence in the market. Commented Mar 21, 2020 at 18:54
  • @Harper-ReinstateMonica They're in a managed fund. They really don't need confidence in the market because the fund manager can adjust the fund's exposure to the market. But I've seen people make really dumb decisions because they think there's some meaningful difference (other than for tax purposes) between realized and unrealized losses. There isn't. Commented Mar 21, 2020 at 19:19
  • Wow, you're point-proof. The thing about being an actuary is you need to know when to stop thinking like one and have compassion. Commented Mar 21, 2020 at 20:17

I think there are two questions here. There's the question about investment strategy in general which I think several people have answered quite well. But then there's the question that's specifically about the 2045 Blackrock Target fund, and how it seems to not be doing too well vs. what the OP's friends are invested in. The performance of an individual fund is always something worth keeping an eye on.

Long term studies have shown that very few brokers -- if any -- do better than a generic index fund. The ones who do tend to have names like Warren Buffet. LPHIX indeed seems to have been hammered in the short term, but that might not be avoidable no matter where you hold your money. In the long term keep an eye on it. If you feel it's underperforming then switch your money somewhere else as is allowed by your fund rules. Better yet, split your money among several funds, some more focused on long term growth, and some that might be looking for a quick hit in the short term. If your company has on-site investment seminars, this is a good place to ask questions about the best strategy for you.

All in all, hang in there! I took a huge hit during the first .bomb crash in 2000. It all came back over time. Optimism is your best friend in terms of long term growth. Good luck!


If you plan to retire in 2061 (your current date based on age 26 - but things may change before 2061 arrives!) you don't need to worry about a market crash now. You need to worry about a market crash in 2060.

Of course there is nothing you can do to predict that now, but you have done one sensible thing. Your Blackrock target date of 2045 gives you the chance to change your strategy when you are getting close to 2061.

Never forget that the whole topic of "successful investment strategy" is very simple. You buy stuff when it is cheap, and sell it when it is dear. You don't panic and sell stuff today at a giveaway price just because everybody else is panicking and nobody wants to buy (which is why prices are low!)

The second most important strategy (IMO) is not to get suckered into whatever is considered the current investment "best buy." Specifically, considering pensions, you don't make money from investments by "saving tax." You make money from buying cheap and selling dear. If you make enough return that way, you don't care about paying tax, since you can't avoid it (legally) in any case.

Pension funds certainly have some tax advantages but those on their own won't make you rich, or even self-sufficient when you want to stop working. And if "the government" decided to make some particular scheme attractive because it is "tax efficient", never forget that some time between now and 2016 "the government" can (and almost certainly will) change the rules in some manner that you can't predict.

If you are worried about "losing your pension investment" because the market crash will turn into economic meltdown, you are worrying about the wrong thing. Forget about cash, and figure out how you are going to stop other people stealing your food before you get a chance to eat it, for the next few years. Having an extra $20k in cash won't make much difference to solving that problem. Or just accept that in the worst case scenario, you (and almost everyone else) are going to die young and there is nothing much you can do to change that!

I am 26 yo and have total $27.5k contributed to my 401(K). I have chosen 2045 Blackrock target date fund and my 2020 first quarter rate of return is -37% due to the current market blood bath. I have lost around 7.5k in the first quarter itself in 2020 and my current balance stands at ~20k. [snip] Should I take any action right now?

Invest! Invest! Invest! Stocks have a 37% sale!

My advice in situations like this is to convert every banknote you have into your bank account balance. Leave only whatever emergency fund you need to the bank account, and with all of the rest, go all in to stocks.

I have experienced about -35% rate of return. I don't panic. Instead, I deposited all banknotes I have to my bank account, and am currently heavily buying stocks. If the market goes down, my stock investments don't go down in value because I replace whatever value they have lost with new investments.

I have for example bought shares of:

  • Home appliance manufacturing company
  • Hydropower and nuclear power company
  • Food company
  • Property management company
  • Server computer manufacturing company
  • 3 chemical companies
  • Heavy mining equipment company
  • Silver mining company
  • Heat pump manufacturing company
  • 2 diversified electrical equipment manufacturing companies
  • Shopping center owner company
  • Tractor company
  • Industrial gas manufacturing company
  • Concrete manufacturing company
  • Ball bearing manufacturing company
  • Fertilizer manufacturing company
  • Aluminium manufacturing company
  • Automotive safety equipment manufacturing company
  • Heavy truck manufacturing company
  • Forest harvester manufacturing company
  • Telecommunications company
  • Wind turbine manufacturing company
  • Car manufacturing company

I will continue my investments as the market goes down. Very soon, I have enough shares of the hydropower and nuclear power company that I'll be self-sufficient in terms of electricity for the rest of my life: I will have enough power production to heat my home, power my home appliances, charge the electric car I yet don't have and supply electricity to all of the companies whose shares I own.

About the only thing bad in this situation is that soon I'll have to down-throttle my share purchases.

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    Is this whole answer a joke, or just the "self-sufficient in terms of electricity" part?
    – Justin
    Commented Mar 18, 2020 at 20:30
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    Probably not a joke. My dad makes a point of owning enough oil stocks that the dividends alone more than cover his fuel expenses. Similarly he owns enough energy stock so dividends more than cover his electric costs. He has similar strategies for most other recurring expenses in his life. While not strictly self-sufficient in the sense of generating his own resources, it does effectively pay for itself.
    – psaxton
    Commented Mar 19, 2020 at 3:01
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    "Wall Street is having a half-off sale" is definitely a meritorious statement, but the follow-through is ... bizarre, and that ruins the answer. Commented Mar 19, 2020 at 3:29
  • @psaxton I guess you could say that, in a sense, he owns more oil rigs and refineries than the amount he needs to produce his own oil and gasoline, so he gets his for free and sells some to other people. Kinda metaphorically, but also kinda literally. Commented Mar 19, 2020 at 12:35
  • @user253751 yes but in a way it's really bizarre to think of it this way, because one could just as easily own enough (for example) tobacco stocks that the dividends from them completely pay one's electricity bill as well. money is fungible.
    – user12515
    Commented Mar 20, 2020 at 7:21

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