Highway6 Posted September 5, 2008 Share Posted September 5, 2008 Your 401K got you down? Economy sucking... 401K losing more money every day...Figure we need a thread to complain and offer other people suggestions, etc.I have 2 401Ks... My current and the one from my last firm. At the time I loved my investment options through my old manager and didn't want to roll it over to the manager my new firm uses.I'm left with a pretty stagnant 2nd fund obviously. At first, this wasn't an issue since I had gains of about 12% in the first yr...Of course, since Dec, that has dropped to losses of about 15%.My question is, was this a stupid tactic to try to maintain a 2nd mostly stagnant account ? Only 'mostly' stagnant because the yr end dividends were substantial and i stupidly thought, that would last forever and my stagnant secondary account would actually grow.I'd feel really bad about cutting losses now and rolling it into my active 401k which i consider has inferior investment options.... but it also sucks watching money drain away every day.Another option that i didn't persue simply becasue I didn't really understand it, would have been roll over the original 401K to a Roth IRA with the same fund manager. I didn't do this becasue I figured I don't have enough excess income to actually contribute to that IRA on top of the 401K, so it would be an equally stagnant account...Anyways.. stories from people in similar situations or advice from the financial gurus would be welcome. Link to comment Share on other sites More sharing options...
westguy76 Posted September 5, 2008 Share Posted September 5, 2008 It's all Bush's fault. Obama will CHANGE your fortune in the market by raising taxes and pulling out of Iraq. Oh yeah he will find Bin Laden too, and on the cheap.Seriously my 401K has been in the crapper for at least 2 years straight.What you should do probably depends on several factors, including how far from retirement you are, your current net worth, and what type of investments you currentley have. There is a guy that talks money that is sindicated on the local AM radio station that could answer your question, can't recall his name, I think the show is called money matters. Link to comment Share on other sites More sharing options...
crunchtastic Posted September 5, 2008 Share Posted September 5, 2008 Your 401K got you down? Economy sucking... 401K losing more money every day...Figure we need a thread to complain and offer other people suggestions, etc.I have 2 401Ks... My current and the one from my last firm. At the time I loved my investment options through my old manager and didn't want to roll it over to the manager my new firm uses.I'm left with a pretty stagnant 2nd fund obviously. At first, this wasn't an issue since I had gains of about 12% in the first yr...Of course, since Dec, that has dropped to losses of about 15%.My question is, was this a stupid tactic to try to maintain a 2nd mostly stagnant account ? Only 'mostly' stagnant because the yr end dividends were substantial and i stupidly thought, that would last forever and my stagnant secondary account would actually grow.I'd feel really bad about cutting losses now and rolling it into my active 401k which i consider has inferior investment options.... but it also sucks watching money drain away every day.Another option that i didn't persue simply becasue I didn't really understand it, would have been roll over the original 401K to a Roth IRA with the same fund manager. I didn't do this becasue I figured I don't have enough excess income to actually contribute to that IRA on top of the 401K, so it would be an equally stagnant account...Anyways.. stories from people in similar situations or advice from the financial gurus would be welcome.Roll it into the Roth. There's no income restriction on the rollover, just the standard yearly contribution rules and caps apply on new money. EDIT: oops, I misread you the first time. Even if you think you can't make contributions, do the rollover anyway, so you have the option when you do have the money. And moving to another plan usually gives you more or different fund options, because IRAs typically have more to choose from than 401ks, where the choices are determined by the plan administrator.My current 401k is around -12%. The big money is in my IRA which is hanging on at around +2%. After losing my ass the first time around in the tech bubble, I can attest that you can rebound, it just takes time. Don't be tempted to stop contributions. I'm also a believer in always keeping an equity position, even through the losses. When the market does see gains, you won't benefit if you've dumped everything into the fixed account. Link to comment Share on other sites More sharing options...
editor Posted September 5, 2008 Share Posted September 5, 2008 Mine's been OK, but not great. What I've been doing is keeping an eye on the stocks that aren't doing well enough and selling them when the time comes, then sitting on the money rather than buying something new. I'll just wait until things start to look better. I'd rather get 1% return on my money (or whatever it is that my brokerage has for interest on cash balances) than -10%. Link to comment Share on other sites More sharing options...
Highway6 Posted September 5, 2008 Author Share Posted September 5, 2008 It's all Bush's fault. Obama will CHANGE your fortune in the market by raising taxes and pulling out of Iraq. Oh yeah he will find Bin Laden too, and on the cheap.Seriously my 401K has been in the crapper for at least 2 years straight.What you should do probably depends on several factors, including how far from retirement you are, your current net worth, and what type of investments you currentley have. There is a guy that talks money that is sindicated on the local AM radio station that could answer your question, can't recall his name, I think the show is called money matters.29.. so far from retirement.My original idea with the old fund was, since i could still move money to any investment option eventhough I wasn't contributing.. i figured, heres a good secondary account, one i can attempt to play the ups and downs of the market..plan being to switch from Moderate High risk after making some good gains to a safe Money Market account ( Holding pattern) until i felt the market was back on the upswing where i would start over again at lower cost, high earing potential funds.Unfortunately, even though i'd been following ups and downs and Fed reports and knew exactly when i wanted to pull out ( last Thanksgivingish ).. i stupidly held on to my funds to reap a 2nd yr of substantial yr-end dividends ( becasue I really dont know how dividends work and was afraid i wouldnt get them if i sold them off early )... At that point... Once they start to slide, and obviously not knowing how long or how far the market will slide... I kept holding on hoping to get my gains back..... and 10 months later, that strategy has lost me lots and lots of money... and it will probably continue to cost me money since the thought of getting out of those particular funds and kissing away those losses forever is sickening. Link to comment Share on other sites More sharing options...
crunchtastic Posted September 5, 2008 Share Posted September 5, 2008 29.. so far from retirement.My original idea with the old fund was, since i could still move money to any investment option eventhough I wasn't contributing.. i figured, heres a good secondary account, one i can attempt to play the ups and downs of the market..plan being to switch from Moderate High risk after making some good gains to a safe Money Market account ( Holding pattern) until i felt the market was back on the upswing where i would start over again at lower cost, high earing potential funds.Unfortunately, even though i'd been following ups and downs and Fed reports and knew exactly when i wanted to pull out ( last Thanksgivingish ).. i stupidly held on to my funds to reap a 2nd yr of substantial yr-end dividends ( becasue I really dont know how dividends work and was afraid i wouldnt get them if i sold them off early )... At that point... Once they start to slide, and obviously not knowing how long or how far the market will slide... I kept holding on hoping to get my gains back..... and 10 months later, that strategy has lost me lots and lots of money... and it will probably continue to cost me money since the thought of getting out of those particular funds and kissing away those losses forever is sickening.I will tell you what any good financial adviser will tell you, assuming we're talking about qualified plans and not discretionary investing:You already know this stuff, but just a reminder.Your primary considerations are time until retirement and risk tolerance.Following and understanding the market is good. Excessive trading inside of a qualified account is not good. You cannot time the market. At 29, your strategy for a 401 k or IRA should be to buy and hold. You should also be maxing out contributions to both before doing any other investing in stocks. (tax deferral, etc).I'll be blunt: The money- market holding pattern strategy is the single biggest mistake qualified plan investors with long time horizons can make. Returns data has proven this time and again. Taking everything out when you think you see the bottom will not work because you can't accurately time that. Same thing with geting back in. Watching your returns day in and day out will only frustrate you. You will make your money back over time, but only if you suck it up and get out of a cash position. It takes years, but it will happen.Good luck!Oh, and I not just talking out of my ass, I've been in the business of retirement plans and variable/index insurance since 1991 and have had an alphabet soup of securities licenses over the years. However, I do not currently sell, so I'm not holding myself out as a broker. Good luck. It will get better. Link to comment Share on other sites More sharing options...
Highway6 Posted September 5, 2008 Author Share Posted September 5, 2008 I'll be blunt: The money- market holding pattern strategy is the single biggest mistake qualified plan investors with long time horizons can make. Returns data has proven this time and again. Taking everything out when you think you see the bottom will not work because you can't accurately time that. Same thing with geting back in. Watching your returns day in and day out will only frustrate you. You will make your money back over time, but only if you suck it up and get out of a cash position. It takes years, but it will happen.Good luck!Oh, and I not just talking out of my ass, I've been in the business of retirement plans and variable/index insurance since 1991 and have had an alphabet soup of securities licenses over the years. However, I do not currently sell, so I'm not holding myself out as a broker. Good luck. It will get better.Well, it was the strategy i wanted to follow and didn't. I figured it would be safe for what i considered my play 401k.. one that is stagnant. To me, the fact thats its small, secondary, and relatively stagnant gives you the freedom to try this strategy.I know following the ups and downs of the market is a act in futility.. but i also cant help but think that i would be in a much better situation right now had i pulled out when i was planning to last november and not lost thousands.It's a stagnant account.... even if the market fully recovers within the next 2 months.. thats a whole yr that this account will have done nothing for me. IT almost seems that if you have a additional stagnant account, you have to play the market to make it grow........ Which might be the perfect case for NOT having a stagnant account actually.Anyways.. I do appreciate the advice and your thoughts on rolling over to Roth. Link to comment Share on other sites More sharing options...
OkieEric Posted September 5, 2008 Share Posted September 5, 2008 .. but i also cant help but think that i would be in a much better situation right now had i pulled out when i was planning to last november and not lost thousands.See - I think this is the problem with the individual investor, including myself. I wanted to pull out, but didn't - it's very easy to focus in on that time you wanted to sell all, which would have ultimately been a good move. Right now I want to go out and buy hand over fist, but I haven't and likely won't... In a year, if the market rebounds, it would be just as easy to say "I should have bought when I planned to". I personally leave my 401k's as fairly passive and attempt to leave them diversified. I used to overtrade for "fun" in my personal accounts but have pretty much cut out trading all together this year. If you're comfortable with your holdings in the long term, just stop checking your accounts for a while. It will all work out, lol Link to comment Share on other sites More sharing options...
MidtownCoog Posted September 5, 2008 Share Posted September 5, 2008 Pulling out is a bad, bad idea. Instead you should move your investment allocations, but don't pull out of the market. That leads to missed opportunities.When one segment is moving down there is always another at least making some gains. Link to comment Share on other sites More sharing options...
Highway6 Posted September 5, 2008 Author Share Posted September 5, 2008 Can someone please give me a run down on dividends? My 3 funds in my secondary stagnant account has them. My active 401k does not.. even though I've had it for nearly 2 years and some of that time it did make modest gains.Why is this? What decides what funds have yr end dividends ?How i understand it... it's like a snapshot at year end of the performance of the fund for that yr, and that is basically awarded as further capital to be invested in the same fund.So, the last 2 Decembers, i got healthy dividends in this stagnant account. Would i have gotten the same dividends had i moved everything in those 3 funds to either a holding account of another fund upon closing my time with those particular funds?... or does it actually work more like a once a year reward for those that are in that fund at the time the yr end dividends are doled out ?I assume come this december, there will be no dividends since there have been zero gains for the year.Also, i really dont like how J Hancock does things. They dont go by the market closing price on a fund, but by the unit value which to me seems to be some arbitrary value that follows the ups and downs of the fund closing price.Still... makes it harder to follow. Link to comment Share on other sites More sharing options...
BryanS Posted September 5, 2008 Share Posted September 5, 2008 Well, it was the strategy i wanted to follow and didn't. I figured it would be safe for what i considered my play 401k.. one that is stagnant. To me, the fact thats its small, secondary, and relatively stagnant gives you the freedom to try this strategy.I know following the ups and downs of the market is a act in futility.. but i also cant help but think that i would be in a much better situation right now had i pulled out when i was planning to last november and not lost thousands.It's a stagnant account.... even if the market fully recovers within the next 2 months.. thats a whole yr that this account will have done nothing for me. IT almost seems that if you have a additional stagnant account, you have to play the market to make it grow........ Which might be the perfect case for NOT having a stagnant account actually.Anyways.. I do appreciate the advice and your thoughts on rolling over to Roth.First, you don't lose or gain anything if you don't sell. You're decades away from retirement. There is no need take any gains or losses, yet.Also, you could lose 10's of thousands of dollars, if not hundreds of thousands of dollars by trying to time the markets, for long term returns.Find a good lifecyle fund, dump everything into it, max it out every year. Get a Roth, do the same thing, and don't worry. Link to comment Share on other sites More sharing options...
20thStDad Posted September 5, 2008 Share Posted September 5, 2008 Yeah I'm actually stoked that it's so low, since I'm a buyer and not a seller right now. I'm getting more shares every contribution. Over time I know it will go up, how much who knows. But I'm 28 years from being able to take it out without penalties, so it really doesn't matter to me. Link to comment Share on other sites More sharing options...
Highway6 Posted September 5, 2008 Author Share Posted September 5, 2008 Find a good lifecyle fund, dump everything into it, max it out every year. Get a Roth, do the same thing, and don't worry.I agree, i am way off and that you're right, i dont actually lose anything if I don't sell....Finding a good lifecycle fund, or any fund, at this time would require me selling and losing thousands in the funds I'm currently in.I cant buy low into anything else right now without realizing those losses.Does anyone have input on my dividends inquiry? Was I close, way off ? I could use some clarification. Link to comment Share on other sites More sharing options...
crunchtastic Posted September 5, 2008 Share Posted September 5, 2008 Yeah I'm actually stoked that it's so low, since I'm a buyer and not a seller right now. I'm getting more shares every contribution. Over time I know it will go up, how much who knows. But I'm 28 years from being able to take it out without penalties, so it really doesn't matter to me.You, sir, are taking advantage of dollar cost averaging!Maybe someone actual reads the metric tons of retirement planning stuff I have created in my lifetime. Now if only my sales guys would stick to the legally correct content I give them to use with clients....... Link to comment Share on other sites More sharing options...
crunchtastic Posted September 5, 2008 Share Posted September 5, 2008 I agree, i am way off and that you're right, i dont actually lose anything if I don't sell....Finding a good lifecycle fund, or any fund, at this time would require me selling and losing thousands in the funds I'm currently in.I cant buy low into anything else right now without realizing those losses.Does anyone have input on my dividends inquiry? Was I close, way off ? I could use some clarification.There are different ways that funds handle dividends. You'll have to (ugh) read the prospectus on that one. Personally, I would not sweat potentially losing the dividends. In the long term, you're better off forfeiting those to gain better investment control and more choices. For target date funds (aka lifestyle) Fidelity and T. Rowe are good bets. Link to comment Share on other sites More sharing options...
Highway6 Posted September 29, 2008 Author Share Posted September 29, 2008 Lost an additional 4% in 1 day.Dow is at Oct 2005 levels.Dow is down 27% from its 14000 high a year ago.Even assuming this mess gets fixed, how long will it take to get these investments back in the green.That stagnant secondary 401k... one day I'm going to look back and realize that it did zero for me for 2 years.. maybe longer. Link to comment Share on other sites More sharing options...
Original Timmy Chan's Posted September 30, 2008 Share Posted September 30, 2008 Lost an additional 4% in 1 day.Dow is at Oct 2005 levels.Dow is down 27% from its 14000 high a year ago.Even assuming this mess gets fixed, how long will it take to get these investments back in the green.That stagnant secondary 401k... one day I'm going to look back and realize that it did zero for me for 2 years.. maybe longer.Just hold on...it may take a few years, but assuming that the world is not coming to an end, you'll make all your losses back and much, much more.I'm sure it's not pretty today, but the point is, it doesn't matter to me what the value is today...I'm more interested in what the value will be in 30 years (since I'm about 30 years from retirement.) Link to comment Share on other sites More sharing options...
editor Posted September 30, 2008 Share Posted September 30, 2008 When I heard last night that it was the biggest point drop in history, that triggered by "buy" instinct.Loaded up on Johnson & Johnson, Apple, Ecolab, and something else (P&G or Tesco or something). Link to comment Share on other sites More sharing options...
Mark F. Barnes Posted September 30, 2008 Share Posted September 30, 2008 The numbers are recovering, my GOOG is back up 30, all five of mine are coming back slowly. AAPL has a ways to go, CVX is up 3. Should have dumped YHOO when it spiked at 34+ back in December '07. But I still got in cheap so I still up but not like it was. AT&T has been the puzzler to me, just can't get a hand on it, it was @43 this time last year, been sliding every sense. Talk about a slide GOOG was @742 this time last year, today 411 +/-!!But all in all looks like a pretty good day, much better than yesterday. More players it appears today, a lot of people on the sideline yesterday. Link to comment Share on other sites More sharing options...
editor Posted September 30, 2008 Share Posted September 30, 2008 I hear you on the AT&T. I've been watching it on and off for the last year or so waiting for the right time to get in, but it's really erratic. Ecolab (ECL) is like a turtle -- slow and steady wins the race. Link to comment Share on other sites More sharing options...
musicman Posted September 30, 2008 Share Posted September 30, 2008 If you had purchased $1,000 of Delta Air Lines stock one year ago, you would have $49 left.With Fannie Mae, you would have $2.50 left of the original $1,000.With AIG, you would have less than $15 left.But, if you had purchased $1,000 worth of beer one year ago, drunk all of the beer, then turned in the cans for the aluminum recyclingREFUND, you would have $214 cash.Based on the above, the best current investment advice is to drink heavily and recycle.It's called the 401-Keg Link to comment Share on other sites More sharing options...
HtownWxBoy Posted September 30, 2008 Share Posted September 30, 2008 I am not looking at my 401K... I know it's down... it's just on paper, I am optimistic the markets will go back up... here's hoping! Link to comment Share on other sites More sharing options...
crunchtastic Posted September 30, 2008 Share Posted September 30, 2008 Everyone snicker at crunch in her tin foil hat, but I'm gonna buy some more gold. Actually I've got a nice diamond from the ex husband lying around collecting dust. It's worth about 3 ounces of gold. And even a little beer money left over for the 401-keg. Now's about time for the gold crazies to start coming out of the closet. I already saw one video on Bloomberg with some dude predicting $2,000 gold by year end. Link to comment Share on other sites More sharing options...
Mark F. Barnes Posted September 30, 2008 Share Posted September 30, 2008 Dow's up 500 and hanging tough....... We will seeAnd they said Oil will be $25/bbls, I'm not holding my breath...... Link to comment Share on other sites More sharing options...
editor Posted September 30, 2008 Share Posted September 30, 2008 Now's about time for the gold crazies to start coming out of the closet. I already saw one video on Bloomberg with some dude predicting $2,000 gold by year end.Sweet! I'll cash in my one gold tooth and get all the others fixed! Link to comment Share on other sites More sharing options...
crunchtastic Posted September 30, 2008 Share Posted September 30, 2008 Sweet! I'll cash in my one gold tooth and get all the others fixed! Between that remark and the new avatar, I'm seeing our editor in a whole new way. Link to comment Share on other sites More sharing options...
Mark F. Barnes Posted September 30, 2008 Share Posted September 30, 2008 My little pouch of 1984 Krugerrands are looking pretty damn good now. Link to comment Share on other sites More sharing options...
Mark F. Barnes Posted September 30, 2008 Share Posted September 30, 2008 GOOG just took a dump went from 40 up @ 14:00hrs to 40 down, trying to find out what the heck happened there. Oh I see, Tech stocks lost their safe harbor status......Oh that's just great. Link to comment Share on other sites More sharing options...
OkieEric Posted September 30, 2008 Share Posted September 30, 2008 GOOG just took a dump went from 40 up @ 14:00hrs to 40 down, trying to find out what the heck happened there. Oh I see, Tech stocks lost their safe harbor status......Oh that's just great.That's some odd looking trading - I wouldn't worry too much, as it's $406 after hours. I'd think that close is a glitch, but there's a fair amount of volume along with it...who knows? Link to comment Share on other sites More sharing options...
Mark F. Barnes Posted September 30, 2008 Share Posted September 30, 2008 Just got this prompt.....Guys, Calm down. This was purely a data error where old data was mixed in with new. There were no unusual trades, even at the close. Take a look at both highs and lows as well as the options and you'll see that it was prevalent for all Google-related securities. It happens sometimes, and there are rules in place to deal with it. All brokers and data feeds sourcing from the Nasdaq will show this error, and any incorrect ticker prices or trade prices will be corrected when the bad data is removed. Google is down a bit in after hours only because of people misunderstanding the data-related drop. It will move back up as soon as this fear goes away, and we will almost certainly see the mid-400s tomorrow, much higher in a couple of weeks when they report (Google's earnings have been stellar even through the economic downturn because they actually benefit from slowdowns as resources are shifted to the most efficient forms of marketing.) Link to comment Share on other sites More sharing options...
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