401ks

[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.

[prescient63]

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.

The investment guru's would need more information such as time horizon, risk tolerance, investment options, company matching, and such.

[CreatingStyle]

You should be investing in the market right now. We have started to correct the problems with the housing market and the credit cruch and oil will basically fix itself. As a day trader I am having my best month ever because the market is up or down a lot, sometimes both, everyday. The volatility is a good sign at a bottom or approaching a bottom. You can be investing in stocks at a very cheap discount. While I'd still advise to have a diverse portfolio including stocks, monies, bonds, etc, I'd be putting more money into stocks than normal.

[Soriak]

"Buy low, sell high" - easiest principle in the world, yet amazingly hard to follow as people are affected by pessimism and euphoria.

The answer to your question depends on how far away you are from your (expected) retirement. The further away you are, the more stocks you should have. Some recommend "120-age"% in stocks, which I think is pretty conservative. Ignore short-term market trends as you're in it for the long haul. A low like this is actually good for stocks, you get more for the same price. I'd also recommend index funds over actively managed ones - very few funds outperform the market long-term after fees, so your odds of picking one that does are slim.

[Cybsled]

Company matches up to %6. I'm only 29, so retirement is awhile from now ;p

[GrobbeeTrull2.0]

My father is watching his 401k dwindle away to nothing. It's managed through Hartford, but hey, what do I know.

[Jysin-DW]

Trust me, you want to be investing in 401k right now. The dips in the market is where you make money. Basically, I started my engineering job back in 2002 right after the Iraq war was kicking off. The market went through the floor. I was maxing my 401k contributions (25% company match). The following years, that initial investment has earned some pretty hefty returns.

Buy low, sell high... its common investment mantra.

[chaos]

My 401k is with Alerus, and there are pretty meager options for investments. They have about 15-20 different funds and that's about the extent of what you can do. I stay pretty diversified so I am not really taking a huge hit, I mean yeah I'm taking a hit but not the 20% hit you are seeing some funds take since January.

[Soriak]

Originally Posted by GrobbeeTrull2.0

My father is watching his 401k dwindle away to nothing. It's managed through Hartford, but hey, what do I know.

The DJI is where it was in late 2006.

[Sharmai]

I'm with nationwide through my company. I have jack all for 401k experience I have just been putting in 10% of my income as best I can since I'm young and have a ton of time.

I talked to a couple investor guys way back when and they said go for the most aggressive stock portfolio pre-setup thingy option they have since I'm young and can weather the up's and down's extremely well.

Well in the beginning i was seeing 12-14% interest then the housing economy went to crap and for awhile I was seeing -8%. ATM I am down -3.4% and my YRD is -5.5%.

It didn't sound all that good to me but apparently with the market the way it is I am supposed to be ecstatic since most people are seeing losses upwards of 15-20% and I'm almost close to breaking even..

Edit* Nationwide does something a little weird I think. It says my personal performance is up 4% but I think its taking into account my contributions to 401k into that. My stocks have taken a YTD -5.5% hit so that's why I say I'm -5.5%.

[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.

You should not change a thing right now. Usually right after a financial crisis, the market bounces back within a few days. If you trade into something else safer (like a bond fund) you will be eating the loss. Its only a loss when you trade out of it.

Like Warren Buffett said, the buying opportunities are in the tough times. And the "weak hands" are usually the only ones that lose. If you are going to buy and sell based on fear, you shouldn't be investing.

I think the statistic being bandied about was that on Black Monday (one of the largest point drops in history), the people that sold based on the news lost like 25% of their asses, while the people that held their equities made a killing.

Don't try to time the market. We've always increased our stock purchases in recession (even if it meant that we didn't eat steak or go to the movies or dinner). After the last recession, we saw our portfolio double three years after the economy came back around (which is pretty good) because we bought stock when everyone else was afraid to and getting out.

When you are a long term investor (you are 29), days like yesterday are insignificant. You would only want to move to something safer if you planned on retiring in less than five years.

I can't stress it enough. Tune out the "market noise" and stick to your plan. Even the financial news reporters engage in sensationalism - its almost never as good or as bad as they say it is.

[Lyrical]

Originally Posted by Soriak

"Buy low, sell high" - easiest principle in the world, yet amazingly hard to follow as people are affected by pessimism and euphoria.

The answer to your question depends on how far away you are from your (expected) retirement. The further away you are, the more stocks you should have. Some recommend "120-age"% in stocks, which I think is pretty conservative. Ignore short-term market trends as you're in it for the long haul. A low like this is actually good for stocks, you get more for the same price. I'd also recommend index funds over actively managed ones - very few funds outperform the market long-term after fees, so your odds of picking one that does are slim.

I agree 100% with this post. The point is to buy low and sell high. You need to stay away from emotionalism and focus on your long-term goals. I was watching the business news and had to turn it off. Its just market noise.

[Lyrical]

Originally Posted by Jysin-DW

Basically, I started my engineering job back in 2002 right after the Iraq war was kicking off. The market went through the floor. I was maxing my 401k contributions (25% company match). The following years, that initial investment has earned some pretty hefty returns.

Buy low, sell high... its common investment mantra.

Unfortunately the idiot investor believes in buying low and selling high, but in reality, they practice buying high and selling high. The idiot investor wants to see which way the market is going, so they liquidate and eat a loss. And then they don't realize the market is on an upswing, so they buy equities again on their way up. He doesn't realize that the "meat" of the gain is made in the tougher times. He follows this pattern his whole life, and when it comes time for retirement, he wonders why he invested so much and has so little to show for it.

The fun part for the people that ignore the market noise is that when the lemmings start coming back in the market, it drives up our portfolios. After the last recession, for the first time, my wife and I were shocked at how much we made when the weak hands starting coming back into the market. It made all of the sacrifice worth it. Our portfolio went from 35K to 75K in less than three years when buying stock became popular again.

That's alot of jack for people that grew up in poor crime-ridden neighborohds. Basic investing knowledge is available to everyone, but not enough people actually follow it.

[Soriak]

Originally Posted by Sharmai

Edit* Nationwide does something a little weird I think. It says my personal performance is up 4% but I think its taking into account my contributions to 401k into that. My stocks have taken a YTD -5.5% hit so that's why I say I'm -5.5%.

Did you buy stocks when it was even lower? It's entirely possible for the price to be lower than when you started, yet still make a profit.

[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.

Your personal performance during this reporting period is (1.17 %).
This performance is for the period beginning 04/01/2008 and ending 06/30/2008. This rate is calculated by considering investment
gain/(loss) for the period, which is reduced by any fees that are included as part of the unit value calculation or withdrawn from your
account. Such fees may include administrative or service provider fees. The personal performance rate is for your entire portfolio and
takes into account your beginning balance and the amount and timing of any deposits or withdrawals.
Your personal performance for this year−to−date is (4.06 %).
This performance is for the period beginning 01/01/2008 and ending 06/30/2008. This rate is calculated by considering investment
gain/(loss) for the period, which is reduced by any fees that are included as part of the unit value calculation or withdrawn from your
account. Such fees may include administrative or service provider fees. The personal performance rate is for your entire portfolio and
takes into account your beginning balance and the amount and timing of any deposits or withdrawals.