My 401k

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AllisonC_IHB

AllisonC_IHB

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I finally got the courage to check on my 401k. I wasn't sure if I should cry or faint first. It has lost about 40% of its value... :down:



My brain tells me to stay put and don't make any changes. It will come back up in, oh, I don't know, 10 years??



My emotions are screaming to do sth about it NOW.



So.... have you looked at your 401k statement lately, and are you making any changes?
 
[quote author="Allison C." date=1226969791]I finally got the courage to check on my 401k. I wasn't sure if I should cry or faint first. It has lost about 40% of its value... :down:



My brain tells me to stay put and don't make any changes. It will come back up in, oh, I don't know, 10 years??



My emotions are screaming to do sth about it NOW.



So.... have you looked at your 401k statement lately, and are you making any changes?</blockquote>


I looked about a month ago and it was down substancially. I lessened the total percentage that I contribute, but that's all. I have no clue if this was a bad strategy, but I could not stand to throw more money into it when it was doing so poorly. In any case, I was nearing the max yearly contribution anyway.
 
Yes and no, I saw the writing on the wall and took a HUGE loan out of it and transferred the majority over to cds/bills/bonds. Still its down someting like 26% and the rest is just liquid until the housing market comes back. On the plus side the loan only costs me 3% and its sitting in a 4.5% cd (take that... 1.5% - I pwns joo! :lol: )

Unfortunately that extra percentage is just enough to a few dinners, maybe contribute to a few bills.... Otherwise i'm just letting it sit. :shut:



just keep on contributing and everything should be ok.

-bix
 
I have already maxed out this year, hope it will catch up in less than 10 years. I was considering making some changes since 40% of it is in mutual funds. But I don't wanna sell low... Please Obama, Do Something Like You Promised! :long: :cheese:
 
Went to cash equivalents in June 2006 at SPX 1250, been waiting for an entry point ever since. Last month, I pushed-in about 15% of my stash at SPX 850 or so. Now I'm watching for the next leg down.



From then to now, I've been doing only the 5% payroll contrib needed to get my full company match. The rest I was saving for a down-payment on a house. That 5% was all going to a European index fund that was flying high due to the weakening dollar. The EU markets tanked and the dollar started its countertrend rally thus wiping out all of my gains. Oh well.



I'm now making 25% payroll contribs to a mix of index funds and will continue to do so.



I definitely don't think I'm any kind of genious for selling at SPX 1250 and easing back in now. I just got lucky for once in my life (hopefully). If we get a severe crash, at least I will be "made whole" a little sooner than if I'd just remained in the market the whole time.
 
I read this thread this morning and it prompted me to check my 401...



It's down by $85,067.06 so thanks a lot :sick:



As you can tell, I'm a real financial Guru !! :-S
 
Well that's only, what, 3% for you, right? Seriously, a lot of billionaire "gurus" are licking some pretty deep wounds right now. Take comfort in that at least. Those in heavy cash have gotten a lot richer lately, relatively speaking.
 
[quote author="Daedalus" date=1227026486]Well that's only, what, 3% for you, right? Seriously, a lot of billionaire "gurus" are licking some pretty deep wounds right now. Take comfort in that at least. Those in heavy cash have gotten a lot richer lately, relatively speaking.</blockquote>


pfffffft!! 1% more like!! :red:



Hey, if anyone here on IHB would like financial advice just PM me, I'm offering it for free!!



By the way, what do they mean by "Stable fund"?



:cheese:
 
I would be seriously considering upping and buying right now in my 401k. I could be wrong, but I do think for the longer term perspective this would be a good time. I do however remain cautious, and while not everyone has the time to spend to hedge themselves, I would be hedging just in case. WINEX posted a <a href="http://hussmanfunds.com/wmc/wmc081117.htm">great link to Hussman's Funds outlook</a>. I highly, er I mean you need to take the time to read it, period. I agree with the outlook, and I respect a fund manager who applies econometrics to his investing. My only concern is on earnings. If we continue to see declining earnings in a wide range of sectors, then those that do hedge will come out okay, but those who don't will get hurt some more. With that being said, I do believe volatility will remain for some time, and no matter what happens we will continue to see large swings in the markets, but I believe the risk/reward ratio is leaning towards the reward. As Buffett says, sell when people are greedy and buy when people are fearful.



I will also stress the importance of doing your homework. You need to be reading the prospectuses and annual reports of the funds you invest in. You need to put this on your to do list and you need to take the time to do this. For example, <a href="http://hussmanfunds.com/pdf/annrep08.pdf">here is the annual report to the Hussman Fund I mentioned before</a>. You can see what they are invested in, how much of what they are invested in, and you can now look back and see what they got whacked on and what they made a killing on. You can't be investing in fund because it sounds good, or because they have great "annualized" returns. If you are not willing to take the time to do this, then you might as well just hand your money over to some yahoo you met on the internet. Heh, judging by some of the yahoos on here it might work out, or... if you misinterpreted Panda, then you would be wanting to poke someone's eyes out with chop sticks.



<em>Disclosure: This is not intended to be investment advice. Anyone who takes this as advice, would be a nutter to the second power, by thinking this is advice coming from a nutter who has a nickname of crackercakes, is just wrong on so many levels. Do your own due diligence before making any investments, and make sure you do it thoroughly. The one thing this nutter has said that is advice, is to do your gawdamn homework. If you don't, then you can't whine about losing money, because it is your own fault you wouldn't take the time to do the research. There is money to be made in any market, and it is up to you to take the time to figure how that is.</em>
 
[quote author="graphrix" date=1227027957]I would be seriously considering upping and buying right now in my 401k. I could be wrong, but I do think for the longer term perspective this would be a good time. I do however remain cautious, and while not everyone has the time to spend to hedge themselves, I would be hedging just in case. WINEX posted a <a href="http://hussmanfunds.com/wmc/wmc081117.htm">great link to Hussman's Funds outlook</a>. I highly, er I mean you need to take the time to read it, period. I agree with the outlook, and I respect a fund manager who applies econometrics to his investing. My only concern is on earnings. If we continue to see declining earnings in a wide range of sectors, then those that do hedge will come out okay, but those who don't will get hurt some more. With that being said, I do believe volatility will remain for some time, and no matter what happens we will continue to see large swings in the markets, but I believe the risk/reward ratio is leaning towards the reward. As Buffett says, sell when people are greedy and buy when people are fearful.



I will also stress the importance of doing your homework. You need to be reading the prospectuses and annual reports of the funds you invest in. You need to put this on your to do list and you need to take the time to do this. For example, <a href="http://hussmanfunds.com/pdf/annrep08.pdf">here is the annual report to the Hussman Fund I mentioned before</a>. You can see what they are invested in, how much of what they are invested in, and you can now look back and see what they got whacked on and what they made a killing on. You can't be investing in fund because it sounds good, or because they have great "annualized" returns. If you are not willing to take the time to do this, then you might as well just hand your money over to some yahoo you met on the internet. Heh, judging by some of the yahoos on here it might work out, or... if you misinterpreted Panda, then you would be wanting to poke someone's eyes out with chop sticks.



<em>Disclosure: This is not intended to be investment advice. Anyone who takes this as advice, would be a nutter to the second power, by thinking this is advice coming from a nutter who has a nickname of crackercakes, is just wrong on so many levels. Do your own due diligence before making any investments, and make sure you do it thoroughly. The one thing this nutter has said that is advice, is to do your gawdamn homework. If you don't, then you can't whine about losing money, because it is your own fault you wouldn't take the time to do the research. There is money to be made in any market, and it is up to you to take the time to figure how that is.</em></blockquote>
That is exactly why I play around shorting the market in my individual trading account (I'm down about 30% this year or about $25k in my 401k). I do however have another 30+ years before retirement so I'm not overly concerned with the short term moved of the market when it comes to my 401k.
 
[quote author="usctrojanman29" date=1227052137]

That is exactly why I play around shorting the market in my individual trading account (I'm down about 30% this year or about $25k in my 401k). I do however have another 30+ years before retirement so I'm not overly concerned with the short term moved of the market when it comes to my 401k.</blockquote>


I have the same attitude, and it actually makes me feel better. I do feel sorry for folks who will actually need that money shortly.
 
[quote author="PeterUK" date=1227025422]I read this thread this morning and it prompted me to check my 401...



It's down by $85,067.06 so thanks a lot :sick:



As you can tell, I'm a real financial Guru !! :-S</blockquote>


Pssh, I went down a smige over 300k.... I'm still on the positive side for this year... but i also lost alot of what it "once was".



At least i'm just slighly positive, which is fine by me.



-bix
 
I shifted everything out of equity mutual funds in Jan and loss approximately 8%. I then moved it into what I thought was the safest thing...money market fund offered by Fidelity, but after reading this blog, Calc'd Risk, Naked Cap...I decided I didn't want to risk the buck being broken. I have currently allocated everything into Pimco Total Return Fund. I figure if you are going to bet, be on the side with the biggest pig at the trough. My 401K options are super limited from a non-equities offering, with just the 2 previous funds as the offering. I think we still have a ways to go as far as stocks getting to their bottom. I may start buying back once we get close to 7500 or in a few years...I figure I mitigated enough losses that I can time the market and still be ok if I am a little off.



Anyone know if I can contribute to my 401K but keep it in cash or is this a plan by plan detail?
 
[quote author="Newport Trojan" date=1227071549]I shifted everything out of equity mutual funds in Jan and loss approximately 8%. I then moved it into what I thought was the safest thing...money market fund offered by Fidelity, but after reading this blog, Calc'd Risk, Naked Cap...I decided I didn't want to risk the buck being broken. I have currently allocated everything into Pimco Total Return Fund. I figure if you are going to bet, be on the side with the biggest pig at the trough. My 401K options are super limited from a non-equities offering, with just the 2 previous funds as the offering. I think we still have a ways to go as far as stocks getting to their bottom. I may start buying back once we get close to 7500 or in a few years...I figure I mitigated enough losses that I can time the market and still be ok if I am a little off.



Anyone know if I can contribute to my 401K but keep it in cash or is this a plan by plan detail?</blockquote>


I would think it depends on the plan, cuz' mine does not allow it. My plan's choices are so limited that sometimes I wonder who's the idiot that picked it from work.

:roll:
 
[quote author="Newport Trojan" date=1227071549]I shifted everything out of equity mutual funds in Jan and loss approximately 8%. I then moved it into what I thought was the safest thing...money market fund offered by Fidelity, but after reading this blog, Calc'd Risk, Naked Cap...I decided I didn't want to risk the buck being broken. I have currently allocated everything into Pimco Total Return Fund. I figure if you are going to bet, be on the side with the biggest pig at the trough. My 401K options are super limited from a non-equities offering, with just the 2 previous funds as the offering. I think we still have a ways to go as far as stocks getting to their bottom. I may start buying back once we get close to 7500 or in a few years...I figure I mitigated enough losses that I can time the market and still be ok if I am a little off.



Anyone know if I can contribute to my 401K but keep it in cash or is this a plan by plan detail?</blockquote>


A cash reserve is a plan design option and its availability is a plan by plan detail. Your contributions need to be allocated according to investment strategy. That investmetn strategy is limited by your investment options of course.



In my companies plan, for which I am the fiduciary, I offer the Fidelity Prime Fund as our safest capital preservation investment option. I have no worries about it losing value... Unfortunately most people have their cash in the target date retirement funds and have been killed recently.
 
[quote author="Allison C." date=1226969791]I finally got the courage to check on my 401k. I wasn't sure if I should cry or faint first. It has lost about 40% of its value... :down:



My brain tells me to stay put and don't make any changes. It will come back up in, oh, I don't know, 10 years??



My emotions are screaming to do sth about it NOW.



So.... have you looked at your 401k statement lately, and are you making any changes?</blockquote>


Depends of your horizon, but taking money away is probably bad now. Even if it drops another 20%, it's more like 10% of what it has been, so even a worse case won't hurt as bad as what already happened ($ wise I should say).



If you have time, just leave it as is. I recommend diversifying in Europe and emerging markets as well for the long term.



One final bit of advice would be to allocate your maximum throughout the year. This would prevent putting money in early, see it drop and can't do anything else.
 
[quote author="Roo" date=1227107163][quote author="Allison C." date=1226969791]I finally got the courage to check on my 401k. I wasn't sure if I should cry or faint first. It has lost about 40% of its value... :down:



My brain tells me to stay put and don't make any changes. It will come back up in, oh, I don't know, 10 years??



My emotions are screaming to do sth about it NOW.



So.... have you looked at your 401k statement lately, and are you making any changes?</blockquote>


Depends of your horizon, but taking money away is probably bad now. Even if it drops another 20%, it's more like 10% of what it has been, so even a worse case won't hurt as bad as what already happened ($ wise I should say).



If you have time, just leave it as is. I recommend diversifying in Europe and emerging markets as well for the long term.



One final bit of advice would be to allocate your maximum throughout the year. This would prevent putting money in early, see it drop and can't do anything else.</blockquote>


Thanks Roo and just wanna say your avatar reminded me that I don't have much time till Christmas to create a better gingerbread cookie recipe. ;-)
 
Just wanted to chime in on the 401K talk. I'm personally opposed to any 401K contributions, but thats just me. I have my reasons. Sure employer matching sounds great and so does the initial tax breaks (which really isn't that much considering your capital gains are still taxed and thats where the money is at) but here is my reasoning as to why.



Lets say you make 100K and you contribute the max 4% of your salary and the company matches another 4%. You get a 100% return. Fantastic when you start off. If you only have 20-30K in your 401K an extra 4K is a great return.



Now, lets fast forward 20 years and lets say you have 1,000,000 in your 401K. Do you think your 4K contribution and 4% matching makes much of a splash? Eh not so much. However, here is the big catch. You don't have the option to buy insurance on your 1M dollar 401K. You can't short the market. You can't buy puts, you can't write covered calls and thus leave yourself completely exposed. On top of that some other dumbass is running the fund for you who obviously doesn't have a clue as to what he is doing since he already lost you 35% this year and still has the balls to collect his management fee.



Let me ask you a question. You have a 1M dollar home...do you insure it? IF so, why not have the option to insure your 401k?



Bottom line, I don't contribute to a 401K, never have...never will because the option to insure your precious retirement nest egg isn't there. I'll simply max out my IRA (because I can buy options) and the rest goes to my personal trading account. Where I manage my own money and where I have the option to protect it.



Now the big excuse is that people always say that they don't know what they are doing or don't care to invest time on a little homework. This is the worst excuse I've seen im my life. So you are willing to have a chunk of your salary go to a 401K but unwilling to learn how it works or what it does? If I didn't know anything about the stock market, I'll be sure as hell to learn anything I can about it to protect my million dollar account. Otherwise why throw money at it? Cause someone told you it is a great thing to do?
 
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