Financial planner encourages patience as ‘volatile’ markets affect 401(k) plans 

ST. JOSEPH, Mo. (News-Press NOW) -- Stock markets enjoyed another good day, rising over two percent Wednesday morning on the heels of a volatile month affecting 401(k) plans. 

A wealth advisor with Gertsema Wealth Advisors said, paying attention to a 401(k) balance is important, but it may not be beneficial to react immediately to the latest developments during volatile times in the stock market. 

“Money is emotional, you've worked hard for it, you put it into that account, you're expecting it to grow," CEO Nick Gertsema said. "But part of the natural market cycle is its ups and downs." 

The latest rise in the S&P comes after President Donald Trump said he had no intention of firing Federal Reserve Chair, Jerome Powell, following recent criticisms for not cutting interest rates. 

Interest rates also influence 401(k) plans. Gertsema said as interest rates go up bond values typically go down and when interest rates go down, bond values tend to go up. 

“That's why it's important to have a diversified portfolio of both stocks and bonds,” he said. “That moves with what your risk appetite is as you get closer to retirement.” 

Gertsema said when you have a 401(k), it’s in the market in one form or another, through investments like stocks or bonds. 

“The S&P 500 has been volatile, but volatility is the price you pay for the long-term returns,” he said. 

Gertsema recommends paying attention to long-term changes in 401(k) plans versus day-to-day changes if the funds will not be touched for more than five years. 

“If you are within five years from retirement or even right about in that window, it's time to put together a plan so that when one of these events happens, because they do happen, volatility happens—it's natural, it's normal—your plan is insulated from that so you don't have to change your plan based on what the markets do,” he said.