what to do with 401k in the new Bush economy?

B

Bad_CRC

Linux Tribes++
Veteran XV
so, now that everything is in the shitter (unless you ask republicans, who will say everything is great!) what to do with 401k? Of course, you should look at the long run for maintaining, even though you'll lose in the short term.

do you decrease contributions?
 
Unless you think the market is going to completely tank for good, you want to keep investing regardless of market condition so that your cost basis averages out. That is to say, you average out the high price you paid for your existing position with lower prices and wind up somewhere in the middle long term. At least, that's the theory.
 
I shifted the focus of mine to less volatile investments. I think i'm 40% international stocks 20% domestic and 40% the "no risk/little gain" stuff at the moment. I expect the stocks to drop a bit more and once it has bottomed out I'll get out of the low risk low yield stuff. My dollar amount hasn't changed. As Rayn said you average your buy in cost out and in my case I get more shares in my company to meet the match. Then again our stock really hasn't dropped much in the last 9 months $74 down to $69. Its actually gone up $2 in the last 4 days....
 
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You should always be diversified in your portfolio (mutual funds, bonds etc.) You should always have high risk areas and low risk areas for the long haul. You shouldn't really be moving your money around in response to market conditions unless you know wtf you are doing.
 
well i won't be retiring for oh 30 years so I was all high risk High yield for a while and did really well. I saw a hint of a down swing and pulled out 40% and stuck it in bonds. I would have lost a good amount of that 40% had I not moved it 2 months ago. So I feel pretty good with my decision.

I basically have 8 different options in my 401K management portal and I just stick a % next to each. Its not like I'm picking specific stocks or anything and by making the moves when I did I've stayed ahead of the average performance by a decent margin.
 
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telos said:
well i won't be retiring for oh 30 years so I was all high risk High yield for a while and did really well. I saw a hint of a down swing and pulled out 40% and stuck it in bonds. I would have lost a good amount of that 40% had I not moved it 2 months ago. So I feel pretty good with my decision.

I basically have 8 different options in my 401K management portal and I just stick a % next to each. Its not like I'm picking specific stocks or anything and by making the moves when I did I've stayed ahead of the average performance be a decent margin.
Click to expand...

I wasn't referring to you specifically.
 
I put all my 401k into penny stocks. I figured they must be good if all those emails are right.
 
I'm leaving mine alone. I'm pretty diversified, but I did have quite a bit in high-risk as I won't be retiring for 30+ years. Right now I'm down -21% on personal return. :-( Hoping that the market swings back around in a year or so and jumps back up.

Here's an interesting graph our 401k company sent out...

stocks.png


Obviously they have a vested interest in you sticking with long term investment, but it did make me feel a little better.
 
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