Author- Justin Ladden

Once upon a time we took it for granted that a money market account would earn an above average interest rate without risking losing money. In the midst of the 2008 financial crisis, the Reserve Primary Fund, our country’s oldest money market fund was forced to lower the net asset value (NAV) of its money market fund below $1 and all of its shareholders saw a loss.

As we view the recent downturn in the stock market, we think about how relieving it would be to receive a steady 4% rate of return every year rather than having these ups and downs.  However, a down market is not always a bad thing.  There are several reasons why it is okay for the markets to occasionally correct.  Here are a few:

Even before the Affordable Care Act was implemented in 2010, health insurance premiums have been increasing at a faster rate than earned income. Individuals and families are feeling the pressure of inflating medical costs as healthcare becomes our country’s largest federal expenditure.

We have heard a lot of chatter recently about the Federal Reserve’s timing on the increase of their federal funds target rate.  The media and many investors have been anticipating this increase for a while now. However, in September 2015, the Federal Reserve agreed to leave the rate unchanged. 

Only a nerd like me would try to compare last week’s New Horizons space probe’s flyby of Pluto with saving for retirement and long-term financial goals.