It may be tempting to put 401 (K) contributions to wait, but hold on to a better strategy

Amid this year Market disorder, I heard that investors are wondering whether they should stop in the contributions of 401 (K) in order for things to settle.

Although this approach seems tempting, it is better to stick to your investment strategy instead of waiting for the improvement of conditions.

Run numbers

To test how the “waiting and seeing” approach would have been a comparative approach to the continuation of investment, I looked at four shrines in the market in the twenty -first century.

In each case, I looked at the results in light of two different scenarios: an investor who started saving $ 500 per month and continued to do this throughout the recession, and another investor stopped saving until the market began to improve. I assumed that all contributions were invested in stocks. (In the first four cases below, I assumed that the contributions had stopped only during Bear market In the question, then resume all the periods that followed.)

Case 1: March 2000 – October 2002

The shares suffered from cumulative losses of about 33 % from early 2000 to October 2002. But the investor who started investing $ 500 per month in March 2000 and continued to do this even throughout the turmoil period, will have about $ 700,000 on March 31, 2025.

On the other hand, the investor will “wait and see” about $ 573,000.

Case 2: October 2007 – February 2009

The market slowdown in 2008 was the second year of marketing for market investors in the stock in The history of the last market.

The investor who started investing $ 500 per month in October 2007 will have continued to make monthly investments by about 360,000 dollars from March 31, 2025. The investor who temporarily stopped until March 2009 will have about $ 307,000 on the same date.

Case 3: February and March 2020

The Covid-19 market shrinkage in the extensive stock market indexes resulted in the disposal of about 34 % of its value from February 19, 2020.

But after this sharp recession, the bounce was more impressive, as the shares recorded 28.7 % during 2021. As a result, the investor “continued to buy” had ended slightly by March 2025, even after suffering from the market shrinkage in 2022 and early 2025.

Case 4: January 2022 – October 2022

The 2022 market reflection was a sharp reaction to the unexpected height of 2021 in inflation, followed by a series of high aggressive interest rates. As a result, the Morningstar US Market index lost about 19 % from January to October of that year.

But thanks to the dramatic recovery of the market, the investor “continued to buy” had ended with about $ 7,000 by March 2025.

Case 5: January 2000 – March 2025

The differences are more dramatic over a longer period.