401ks

[Vinen]

Originally Posted by Sharmai

My level of 401k competence is lower then then that of Makata on the balance of rogues in WoW.

Here's a quote from a statment two periods ago.

Thats possible?

That said, mine is probably just as bad. I just put the 7% in every month (Company gives 3% and matches up to 7%) and don't even pay attention to it.

[Eomer]

My RRSP has been raped the past few months, but as others have said so long as you're taking the long view now would be a terrible time to get out of stocks (100% of my stuff is in various index funds, about 40-50% Canadian and the rest spread out over Europe, US, China, and South America). I wish I hadn't maxed my RRSP contribution earlier this year, as right now would be a great time to be buying in (although things might go down even more, I guess).

As others have mentioned, I got in to buying index funds in about 2001 or 2. It was almost unfair how well I was doing for the past 5 or 6 years up until last summer with the first big drop. 10-20% a year consistently and not even actively trading. So I'm not too worried about losing 10-20% in the past couple months, things will pick up eventually, even if it's not for a year or two.

[Brutul Tarew Marr]

Unless you're planning to retire in the next 5-10 years just keep dumping money into it and don't look at the returns for a few months. As long as your portfolio is reasonably diverse then you're buying at a discount, don't worry about it.

As others have said, dumping your stock now would be the worst thing you could do.

[Snugglebear]

As you get older and nearer to retirement age, you should start shifting your risky 401K toward more stable investments. This prevents you from retiring with nothing if you happen to retire during a down period, like right now.

Can anyone comment on compensation for the managers and brokers? It seems to still be in dotcom bubble mode and might screw over investors.

[Aetos]

only put as much into your 401k as your company matches. take advantage of that. An IRA is much better and gives you more options

[Disp]

Originally Posted by Aetos

only put as much into your 401k as your company matches. take advantage of that. An IRA is much better and gives you more options

401K's and IRA's are pretty much the same thing except you have the option to do a Roth IRA if you invest independently. Fund companies may vary, but there's not much reason to have a separate IRA if you've already got a 401k unless the funds available to you are dog shit.

Like others have said, you wanna invest for the long run. Just toss the same amount in every month, or more if you can afford it. Your best bet for long term gains is a method called "dollar cost averaging" which basically means toss the same amount in every month so months where shares are cheaper you get more, months they're more expensive you get less. This is the most effective way to get the top bang for your buck. Just remember the market is cyclical and will come back up...but if you're investing for retirement you need to bite the bullet right now, because you'll probably make a killing in the next few years.

P.S. It's generally a bad idea to change your $$ to different funds very often because you get a sales charge whenever you do it, and you're likely not gonna time the market anyway.

[Cybsled]

Currently I have %10 of my pay go into the retirement shit. I contribute to the 401k up to what the company matches (6%) and I do 4% into a Roth.

ATM most of my index fund stock stuff is in international markets. Is that advisable or should I try to get a better mix of domestic/international?

[Brutul Tarew Marr]

Mix it up. You don't want to have all your eggs in one basket.

[chaos]

My dilemna is trying to balance saving for retirement wit general savings (which i plan to use for making an extra payment at the end of the year on my house and reupping my home warranty since I bought a 20 year old house) and saving for college for my kid which will be born in March.

I'm like most people, I never saved really until pretty recently, and now it seems like I'm saving half my damn paycheck. Anyway I wondered how much I should be putting towards a college fund and what can I realistically expect out of that?

[Disp]

I can run some #'s for you tomorrow..I do 401K's, 529 plans, etc.. If you start a college savings for your kids early you don't even have to toss a ton into it. Another cool thing that one of my colleagues does is basically takes half the money relatives and friends give his kids for Christmas B-Days, etc. and dumps it into their 529 plans. His look great so far.

[Zaniel]

Originally Posted by Snugglebear

As you get older and nearer to retirement age, you should start shifting your risky 401K toward more stable investments. This prevents you from retiring with nothing if you happen to retire during a down period, like right now.

That's a dangerous generalisation, are you planning to die at retirement? No? Then you don't want to retire at 60 and live to age 90 and spend 30 years in cash. The post retirement period is as much an investment timeframe as pre-retirement. Your investment methodology will depend on when and what you have a need for cash for and that's different for each person, not an arbitary age bracket.

[Lyrical]

Originally Posted by Cybsled

Based on all the fun shit happening at the moment, how would any the economic gurus on the forum recommend altering your workplace offered 401k/ISP investment mix (the managing company is Fidelity)?

Take everything out of stocks? Still keep some? Use one of their pre-fab investment mixes?

Currently my mix is stock-heavy.

So the market looks like its bounced back 400 points in the last hour. Your question is kind of answered. If you look at how the market does around events and crises, most of the time, it bounces back within a few weeks. So the only ones that got hurt were the weak ones that got fearful and sold off.

Its almost always better to hold through weeks like this, even when the media is acting fearful. The market (and the media) tend to overreact to bad news, and some shorts do cover their positions.

[chaos]

Everyone at work last night was talking about taking all their money out of the market due to losses. I tried to explain the folly of selling when the market was down, but no one really wanted to hear that. Oh well, sucks to be them I guess, but I didn't realize that people really did that until actually talking with my coworkers.

[Brutul Tarew Marr]

Hehe, people are amazingly irrational when it comes to stock. Dumping your stock on a "crash day" is the absolute stupidest thing you can do, yet it's a lot of people's first instinct.

[Lyrical]

Originally Posted by chaos

Everyone at work last night was talking about taking all their money out of the market due to losses. I tried to explain the folly of selling when the market was down, but no one really wanted to hear that. Oh well, sucks to be them I guess, but I didn't realize that people really did that until actually talking with my coworkers.

Yup, many of our co-workers/colleagues do this. I kind of make it a goal to tell everyone I know that is in the market to hold tight. Its only a loss when you sell.