cjones65, As my financial advisor, would you suggest I continue purchasing 90% equity for my 401(k) or should I consider a higher percentage of fixed income until things turn around? I know at my age, the majority should be equity since it’s a long term investment, but damn, this is getting ridiculous. =============================================== Do you ever get emails/phone calls like the one above from your friends that aren’t studying finance? What do you say to something like this?
I dreaded going to a wedding this weekend because I knew I would be inundated with questions like that…“oh my vanguard account…” “do you have an inside info about…” etc. See how Palinesque I was in not answering your question, I am learning from her already
Tell them to sell now. Buy treasuries. 30 year bonds yield under 4%… that’s the place to be.
everyday brother. I always forward them to the select SPDRS home page and say leave me alone : ) -
My old econ prof is freaking out and thinking about dumping his whole retirement portfolio.
This is a PANIC, no two ways about it. I am by no means saying that the underlying economics of the entire system are “good” but everything is falling, there are no buyers, everyone everywhere is selling what ever they have left. The good are being brought down with the bad. I’m calling Dow 7500-8000 before it’s all over. At that point, best opportunities in generation for those with anything left to invest.
I tell people that if their time frame is long enough, the only bets that are right are SPY/QQQQ or MRE/12 Gauge. Since I believe that the latter can’t be in your 401-K, that pretty much makes the former a lock.
He might have retirement coming up or need the capital for something. It’s impossible to know how people are feeling. I think the most effective thing is to show investors a list, not a chart, of annual index returns. Alongside that list, show the returns of cash & bonds, and a list of all the bad events… LTCM, 9/11, wars, assasinations, recessions, etc. Show them we are already down this year by more than we were when we faced the cuban missile crisis or the attack on 9/11…whatever.
here’s the question: what do you do with you already have in the 401K? do you take the losses and reallocate? or do you ride it out?
>>LTCM, 9/11, wars, assasinations, recessions, etc. Show them we are already down this year by more than we were when we faced the cuban missile crisis or the attack on 9/11…whatever. Someone did a study I read somewhere saying, downturns driven by widespread credit problems have had been longer and more severe than those driven by other events. He’s a labor economist and doesn’t understand financial markets too well I don’t think although he’s brilliant at math. He’s 62 and didn’t even have a retirement portfolio (his univ has always matched 10%!!!) until 1993. Sort of an absent minded professor x1000.
Nobody really knows, but you shouldn’t be trading your 401-K for all kinds of reasons, starting with it’s a bad way to keep your job.
so i went ahead and stopped allocataing anymore money to my 401K. i was contributing 10% and i get full matching at 5%. question: should i cease to contribute or just dial it down to 5%?
WHat? MAXIMIZE! ARe you insane? this is the time to buy EVERYTHING (in moderation)
needhelp Wrote: ------------------------------------------------------- > so i went ahead and stopped allocataing anymore > money to my 401K. i was contributing 10% and i get > full matching at 5%. > > question: should i cease to contribute or just > dial it down to 5%? The tax benefits alone are enough to outweigh any market downturn. Maximize until you can’t pay your bills.
I’m about 50/50 equity/cash. I’m just going to keep things the way they are for now and then once I see stability return to the credit markets go 80/20 and have 6 months of living expenses very liquid.
virginCFAhooker Wrote: ------------------------------------------------------- > WHat? MAXIMIZE! ARe you insane? this is the > time to buy EVERYTHING (in moderation) Ditto. I just became eligible for my company’s 401(k) and can’t wait to max my contribution after my undergrad debts are taken care of.
Yeah- I upped my 401k contributions too. I don’t see how one could ‘trade’ their 401k. My custodian doesn’t even effect changes until the next pay period and thats if certain conditions are met. The way the market has suffered lately losses have finally surpassed tax benefits- but I still see it as a buying opportunity for those with a long term outlook.
I am not talking about ‘trading’. i am talking about reallocation to fixed income and cash and dial down equity exposure. mt horizon is obviously very long but i have suffered huge losses in my 401K recently. i am thinking whether i am juts doing loss aversion by not reallocating.
I’m about 50/50 equity/cash. I’m just going to keep things the way they are for now and then once I see stability return to the credit markets go 80/20 and have 6 months of living expenses very liquid.
dcallocchia0322 Wrote: > Ditto. I just became eligible for my company’s > 401(k) and can’t wait to max my contribution after > my undergrad debts are taken care of. check what the rate on those is [interest is tax-deductible and some CD’s are yielding 4% for 6 months]… see about deferring them if possible and keep more liquidity. I was able to stretch my loans (without accruing any interest) 2 years by taking half time at a community college. That meant sculpture 101 on Saturdays and Gymnasium requiring 2 visits a week. That way you have a cash cushion for things you may need to take loans out for otherwise. Thats a good thing considering how tough it might be to get them in the current state of events 