The tumultuous end to 2018 in the stock market has left a lot of uncertainty for those holding retirement portfolios, whether a 401(k) or IRA. On the one hand, the overall economy continues to be strong. "The jobs numbers are telling us right now that the economy, while other areas may be cooling, is actually red hot," says Derrick Kinney, Texas-based private wealth advisor.
Indeed, the economy is red hot, with job gains reaching a three-year high in 2018, manufacturing at a 14-year high, and wage growth at its best pace since 2009. Nevertheless, there was definite cooling in other areas. All three major stock indexes were down for the year--the Dow lost 5.6%, the NASDAQ was off 3.9% and the S&P 500 dropped 6.2%. That market volatility was driven by rising interest rates, ongoing trade battles with China and other countries, and the never-ending political turmoil in Washington D.C.
Kinney says to expect more of the same in 2019. "Many investors need to realize that we're about to see some ups and downs in the market like we saw last year, and we're likely to see continued political volatility," he tells KTRH. "As long as jobs numbers stay good and housing stays moderate at best, we expect to see the economy humming along...but we are not going to set a record in 2019."
As for how retirement investors should approach the New Year, Kinney doesn't see a need for major changes or movement of investments. His best recommendation is to simply try to put more into your account. "For most investors, the 401(k) is their single biggest retirement asset," he says. "You want to care and nurture that, and one of the best ways is to add to and increase your percentage (of contributions) every year."