Bear Stearns and Your 401K
With today’s announcement that Bear Stearns is being merged with JPMorgan and Company, will your 401K be affected? There is lots of speculation about this due to the delicate nature of the economy at this time. What will your 401K be like in the future due to the Bear Stearns collapse? Is your 401K safe with the Bear Stearns and JP Morgan merger?
When the Bear Stearns merger was announced, its share price dropped to around $2.00 per share. This is a huge decrease in it’s overall value of its stock price, and the total value of the Bear Stearns company. The $2.00 share price brought the value of Bear Stearns to almost 1/10 the value that it was last week.
So, how does this affect your 401K?
While most people look at the 401K as a long term retirement investment, if you are getting closer to retirement, you could be sweating it out. While the Bear Stearns collapse was met with jitters and shakes on the stock market, the DOW did close up almost 30 points.
Your 401K should be fine as usually just one big news item like the Bear Stearns collapse and merger with JP Morgan shouldn’t affect it. Although your 401K does bear some watching over the next few weeks as it could take a hit on any investments that were owned or managed by Bear Stearns.
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