For you Financial guys...

[Tim M]

Ok, with the market plunging and things not looking so good, I have a question. What is the best theory to follow right now on 401k's? I have lost tons since January, and am thinking about lowering my contribution or moving funds to a low return fund. Patience?

 

[Matthew 10:16]

An expert

Ok, with the market plunging and things not looking so good, I have a question. What is the best theory to follow right now on 401k's? I have lost tons since January, and am thinking about lowering my contribution or moving funds to a low return fund. Patience?

on the nat'l news last night said a lot of people R moving their funds to TBills. Low return but no risk.

 

[rednour1]

I'm buying stocks on Sale right now (In Roth's and 401K's & Mutual Funds). When Schnucks has a sale everyone runs to the store, when the stock market has a sale, everyone runs away. Now is when I want to be buying!!!

Keep looking long-term, the best thing to do with your statements is file them away and not open them right now. Unless you are 10 years or less from retirement (I'm about 30 away)

 

[Randy Hauser]

Craig is right. Now is absolutely the best time to be buying stock. If I wasn't an old retired guy and had idle cash laying around I'd be buying. Stocks are the only commodity I know that people buy more when they are over priced then when they are low. I think history will show that now is a great buying opportunity.

 

[Kerry & Kathy]

Ok, with the market plunging and things not looking so good, I have a question. What is the best theory to follow right now on 401k's? I have lost tons since January, and am thinking about lowering my contribution or moving funds to a low return fund. Patience?

A paper loss on your statement is not a loss until you withdraw or redistribute the funds. So....DON"T withdraw the funds. A 401K is designed for long term investment and retirement so patience is a virtue. You MAY elect to transfer to a fixed return account but if your account has had major reductions since January you are too late. I did what you describe in 2000 before the 2002 stock market correction and I made 6 3/8% fixed return when 401K's were having their face value cut in half...but most of those 401K's recovered over the past several years. However, I made the change to a fixed return when the value of my 401K remained high...not after a major paper loss. I was very lucky in my timing...and it WAS luck. As stocks rebounded after the 2002 drop, I changed my elections from fixed income back to aggressive money market funds and took advantage of undervalued stocks that were then growing rapidly. That rapid growth allowed me to retire in mid 2003. I then turned over my entire portfolio to a trusted friend who is an Ed Jones Representative...and have never regretted the move.

ALWAYS maximize your contribution to a 401K...especially if you have company matching funds to your contributions. You are investing for the long term so try to ignore the short term variations in the economy. However...get professional help when the economy is questionable. Preferably long before...

Randy and Craig are both correct....If you have extra cash right now, contact a financial adviser with a proven track record...such as Edward Jones ( a PRIVATELY held company vs a publicly held company such as those we are hearing in the news being bought out) and invest in QUALITY stocks/ funds that are presently undervalued and posed for growth. A down turn in the economy is THE best opportunity to grow your portfolio.

If you don't already have a financial advisor...get one. It is the best financial move you can make. You and I are not financial experts so why risk your future and financial planning by trying to play one? Get a professional. The small fee will pay for itself MANY times over.

K&K

 

[6stringcobra]

Ok, with the market plunging and things not looking so good, I have a question. What is the best theory to follow right now on 401k's? I have lost tons since January, and am thinking about lowering my contribution or moving funds to a low return fund. Patience?

As your local Financial dude, you should be putting MORE into your 401k at times like these. You buy more shares when the market is down like this. Discipline wins the game in the end.

 

[carpe kid]

Lets put it into perspective. Currently, there is a big issue with cobras going for far less than the cost of the build. If you could get a FFR professionally built with everything you want for 15K would you buy or run? BUT remember, just like a cobra isn't a family car the stock market isn't for short term money.

And remember the following comment "Good no cheap, cheap no good!" Only buy quality.

 

[Tim M]

Thanks, I think I will find an advisor. I put in 16% of my check in to my 401 k of which the company matches 6%. I just want to make sure, as you all have said, I maximize my return in the long run. I figure I have 16 years minimum before I would THINK about touching this money, but boy, looking at all of those negative numbers are depressing.

 

[carpe kid]

I understand. I used to be a financial advisor (8 years). On more than one occation I thought about not staying invested, both for my clients and for myself. With the guidance of others that had been around a lot longer than I, I never got clients out. I also never purchased dot garbage. Funny thing is, as I look back I started in 1997 when the Dow was at 6,500. Go figure.

 

[A Snake]

Buy more toys!!!!

Look for deals on anything you always wanted. Stay in the market however...long term is the only way to, stock market has historically returned 8-10%. Or maybe be like Barrak,put it all in tax free instruments(his is in the top 1 or 2 %) he wants to tax those of us that have been/are successful.
mu .02 worth.