For those tempted to stop investing when the market is declining, there's now one more piece of evidence showing that it's best to stick with your game plan through good and bad market conditions, according to a study released jointly by the
The study "What Does Consistent Participation in 401(k) Plans Generate? Changes in 401(k) Account Balances, 2007-2012," analyzed 7.5 million 401(k) plan participants who participated in their plans consistently throughout 2007-2012. It compared their results with the broader database of 24 million participants. The broader database also includes those who had enrolled in or dropped out of their plans during that time frame.
Despite the stock market drop of 2008, the average account balance of 401(k) participants who continued investing during the five-year period ending
"This data strikingly supports the value of a consistent investment program," says
The study also included some other interesting takeaways:
• Over the analyzed period, the average account balance for consistent participants grew from
• The median account balance for consistent participants at the end of 2012 was
• As of
Keener goes on to say, "Investing requires patience, discipline and consistency. This study is just one more example that maintaining a consistent focus over the long term is hugely important to a successful investment outcome and being prepared for retirement."
More perspective on the study from Certified Financial Planner™
About the company:
Keener Financial Planning is a fee-only financial planning and investment management firm with offices in
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