I’ll be the first to admit that losing money is hard.  I’ve lost a decent chunk of change over the past several months, not only in my individual stock investments but also my 401(k) and a mutual fund.  However I’m here to tell you that you need not worry over it.  The stock market has its ups and downs and right now it’s just on a down note.  Here are the top four reasons why you should not worry about your 401(k) and why you should continue to invest.

1.) The markets average around 10% a year over the long run.

Short-term markets have their ups and downs.  Some years they lose a good amount of their value and some years they do nothing but gain, gain, gain.  It’s difficult to be tolerant of the risks involved in short-term trading so in order to maintain sanity its best to maintain a long-term view of things.  Just remember that your 401(k) might be losing money now, but when its time to retire you should have earned a nice large return off of it.

2.) Don’t forget about the law of dollar cost averaging.

Here’s an important rule to remember.  Dollar cost averaging refers to the ability to reduce risk in an investment by investing a certain amount on a regular basis, rather than investing everything all at once.  This way if the investment doesn’t do so well you don’t lose all of your money.  This rule can also keep you from massive gains, but for those who are less risk-tolerant its truly a blessing.

3.) Economic worries are dragging down the market; these will eventually fade away.

Right now we are in a recession, so to speak.  At the very least the American consumer believes we are and that right there is good enough to create one.  Naturally these economic fears are taking a toll on the financial markets and the stock exchanges.  Be patient and continue to invest and eventually the economy will be back on track and so will your investments.

4.) Buying now will increase your long-term returns.

Some great stocks are severely oversold at this point because of recessionary fears.  This can lead to huge decreases in any funds you might be invested in.  Buying more now while these markets are down will allow your returns to be much higher than they otherwise might have been if you were to just sit still.  So don’t worry about your 401(k) or your other investments.  Just continue to invest and things should start to look up.