When the market experiences stretches of heightened volatility, many investors react in a panic and make some classic investor mistakes, such as buying high or selling low. The natural human tendency is to pile onto trends in the market one way or another.
Yesterday, the IRS published new contribution limits for participants in 401(k) plans for 2015. Effective next year, the maximum contribution amount will increase to $18,000 from $17,500 in 2014. For participants over 50, the catch up contribution limit will also increase in 2015 by $500 to $6000.
Our blog post last Friday focused on the return of volatility to the equity markets. This past week has seen volatility increase amid market declines. On Wednesday, we distributed our thoughts on this continued volatility to clients and friends. Our thoughts are reproduced below:
In August 2011, the Dow Jones Industrial Average traded wildly through several days of 400+ point swings after S&P downgraded U.S. debt from its AAA rating and as the European debt crisis raged on. It has been about three years since the last 10% correction and investors have grown accustomed to low volatility, especially this past year.
The link below is to a helpful article in the Wall Street Journal regarding tax breaks available for recent college graduates. For young investors and their families, it is important to instill good financial practices at a young age.
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