Anyone into 401k shit?
eekamouse
Posts: 267
Looking to start investing some of my income in a 401k plan ... (got a raise incoming).
I'm only 31, so I got some time to save away.
My company has about 20 different "funds". It looks like the most lucrative, over the past several years, have been the "Real Estate Fund" (surprising) and the various "International Funds" (not surprising). Both of those groups hover around 12-13% return.
Most of the "safe" funds hover around 4-5%. A few of the more "aggressive" funds are less than that and one is even negative over it's lifespan... ouch.
There is one "mixed-agressive" that is also in the 12-13% range.
Anyone have their experiences they want to share? Or any advice?
I'm only 31, so I got some time to save away.
My company has about 20 different "funds". It looks like the most lucrative, over the past several years, have been the "Real Estate Fund" (surprising) and the various "International Funds" (not surprising). Both of those groups hover around 12-13% return.
Most of the "safe" funds hover around 4-5%. A few of the more "aggressive" funds are less than that and one is even negative over it's lifespan... ouch.
There is one "mixed-agressive" that is also in the 12-13% range.
Anyone have their experiences they want to share? Or any advice?
Love is more important to me than faith.
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As a Financial Advisor, I can provide you with these "pearls of wisdom:"
1. Make sure that you have a broadly allocated portfolio (i.e. the proper mix of Cash, US Stocks, International Stocks, Bonds and Alternative Asset Classes (Real Estate).
2. Ensure that the portfolio is well-diversified (i.e Value, Growth and Blend Style-wise and Large, Mid and Small Cap exposure).
3. Your 401k may have some "lifestyle" or "target-date" Investment Options where the asset allocation and diversification is predicated upon a retirement date (i.e 2040 or 2045 would be likely retirement dates as you will be 65 in 2042).
4. When determining how much to contribute to the 401k Plan, if you are unsure of what percentage, contribute at least up to the amount of the employer match (if available).
5. Lastly, DO NOT rely upon year-to-date or 12-month returns as a 401k is a long term investment plan (especially for a 31 year old), rather use the 3, 5, 10 and 15 year total return numbers.
6. If you need additional information on the performance of the available funds, visit Morningstar.com and you will find all of the details you need and then some.
Any other questions, please do not hestitate to reply here or PM me.
Good Luck!!!
Jason
For your age, you should be mostly in aggressive and aggressive growth funds and gradually move into more conservative funds as you get closer to retirement (within 5-10 years of retiring).
...are those who've helped us.
Right 'round the corner could be bigger than ourselves.
Yep - the best order is as follows:
1. Company 401K up to the match
2. Roth IRA up to the max
3 Company 401K up to the percentage you want to invest.
I recommend investing 15% of your income to retirement. I've been doing that since entering the workforce, and after awhile it's more about the growth than your contribution.
...are those who've helped us.
Right 'round the corner could be bigger than ourselves.
at least for the next 2-5 years.
Go international.
But i'd be weary of investing in any paper assets right now.
Whoever said go for the IRA, do that.
Do an IRA and do a ROTH IRA,
because if shit hits the fan you can withdraw everything you put in with NO tax penalty.
ALSO, even though you have to do it through an institution which will hold it for you, you CAN hold physical metal in a Roth IRA.
That means if the economy goes apeshit jacked, you can just call your financial advisor or manager or whatever, and have them send you the paper work to transfer your holding over to gold or silver ... which will actualy be held on deposit in your name in a bank account somewhere.
Seriously.
But i know you think i'm crazy.
If I opened it now would you not understand?
My company offers basically 20 different plans ranging from small to large cap, international, real estate, growth, stocks, etc..
You can allocate a certain percentage in each. I could even put 5% in each "fund". Would that be wise or is that too spread out?
Thanks again.
do NOT put money in to realestate funds. NONE of it.
The returns in the real etate market are going to be negative for the next 2-5 years!
I wouldn't be looking towards small caps right now either.
They will be the first to suffer from massive bank write offs.
Your best bet is international or large cap domestics... but i would keep your money as far away from the US economy as possible.
Hell, i'm telling you, keep your money out of the market for a while.
Things are going up here in the short term (maybe) ... but give it 6 months, and we will be staring at the bottom again. :(
We are just waiting on banks to start declaring write offs.
The best thing you could do in the short term would be to NOT fund your 401k, but instead fund a ROTH IRA ... keep a portion of it in metal, and if you absolutely must keep something in paper, do it internationaly ... how about energy or agriculture? ... and then if\when the economy starts stabilizing, you can start funding a 401k.
Like i said, you can take money out of a ROTH IRA at anytime with ZERO penalties (i know. i just did this. swear to god) ... and the only thing you are losing over a 401k is employer contributions?
Are your employer contributions just THAT good?
Like well over 15%?
Because you stand to lose at least 15% on anything you put in this year by mid 2009 with the way this economy looks.
And despite what you may think, do to counterparty obligations and soforth, mutual funds are probably the LEAST safe of any investment. :(
You do NOT want your money stuck somewhere you can't get to and save if this market tanks, you do NOT want to just let them rob you of your savings.
:(
If I opened it now would you not understand?
And I totally agree with Drifting - go international. My fiance is a private wealth manager for a bunch of Microsofties and I guess that's what they are all doing and that's what she did for my 401(k). I am seeing an ok return v. anything in the domestic market.
But also remember that when the economy is in the shitter, you can buy more shares for less. $100 a year ago wouldn't have bought me as many shares as $100 will today. So now is the time to buy (generally speaking). Of course, this does require that you think the market will go back up.
Drifting, my employer is 50% matching
this is a HELL of an assumption.
Any technical analyst worth a salt will tell you that a graph of the Dow\S&P doesn't look promising for any return to the top anytime soon.
look up "Double top" and "technical analysis" in the same search.
maybe referense "reversal pattern".
:(
I'm telling you guys, the days of bull markets in stocks are gone.
This metoric rise was predicated on the back of massive inflation.
In fact, 80% of that huge ass mountain of a graph IS inflation... it has NOTHING to do with real gain in values ...
unless you know something i don't about the stability and health of the dollar (like, does it have any?) ... there is no way for the US Government to sustain that type of inflation driven gains for any further length of time.
But honestly, what i'm talking about is basicaly the end of our economy, so, fuck it eekmouse ... throw that 401k heavy in to small caps, growth, international, and anything with a double digit return listed next to it.
Go for broke, cause that is where we are all headed anyhow.
:(
Best case scenario we have 10 years of deflation and depressed markets.
Reference 1929-1939.
:(
If I opened it now would you not understand?
Jesus dude ... have you built your bunker yet?
for the least they could possibly do
http://money.cnn.com/2008/04/08/news/economy/fed_minutes/index.htm?cnn=yes
You know the story. Listen, opinions are like assholes.
Post the funds. Send them .pdf. I'll tell you. If you want a guarantee, go see the guarantee fairy.
Take the companies monies. It's free!
Support your local Pearl Jam.
lol.
one of these days you guys are gonna wake up and realize i'm not some fucking idiot loon, and that i have a brain, know how to use it, and am indeed pretty much spot on with much of what i ramble about.
Yes. The fed "agrees" with me.
:rolleyes:
Let me be the first to tell you that if the Fed is volunteering this much that the real truth is probably going to be much worse.
If the Fed is admitting it is powerless to stop a down turn in the economy, it is essentialy saying that it can not inflate the currency enough to offset the countervailing write-offs and asset deflation from housing.
The amount of dollar losses to the banking & loan industry via housing depriciation is unthinkably massive ... several trillion dollars ... and it is going to put a serious burn on all of our asses.
I'm telling you guys, you don't understand just how serious the precarious nature of our little fiat currency bubble world is.
You can blow the bubble up REAL big ... but it gets so tight that the tiniest little disturbance and BANG.
Hey, SLUDGE_FACTORY, are you around?
Ask this dude. He's been readin' the book i've been hypin ... the Jekyll Island book ... he can vouch ... shit is WHACK.
Okay, i'm done.
Sorry, drinkin the Ezra Brooks again.
mmm, that smooth sippin whiskey.
lol
If I opened it now would you not understand?
if you think real estate funds are going to be negative the next 2-5 years, then why would you wait to buy them? are you going to buy high? doesn't make much investment sense.
also, recessions happen, its part of the business cycle. its not the end of the world.
like a few of you have said before, pick a broad set of mutual funds across all of the various asset classes and be a long term investor. trying to time the market and stock (or fund) pick doesn't really work.
I don't really agree with a lot of this advice. This person is 31. It's OK if the real estate market is bad the next 2-5 years because he/she isn't retiring in 2-5 years. In addition, if the market is low and you have a longterm goal - like retirement - that's the time to pour money into it like crazy.
This person needs to be thinking long term at this point and the best thing to do long term is to invest in aggressive funds with a proven longterm track record.
...are those who've helped us.
Right 'round the corner could be bigger than ourselves.
Here is a tip.
If you have evidence to indicate that ANY investment is going to yield bad results in the short term, NEVER take the trade.
It doesn't matter what your risk tolerance is, and it doesn't matter what your time frame for investment is.
Unless the opportunity is one that is only presented once, and the long term yields seem extraordinary, there is NO reason to take on overt short term risk for potential long term upside. Why? Because in the short term your money could be making you money somewhere else, instead of suffering unecessary losses in hopes of gains way behind the horizon.
Listen. If real estate bottoms and stabilizes in the next few years, Eek can "rebalance" his portfolio.
No one is saying he is stuck with his 401k portfolio forever.
He can rebalance it whenever he wants as far as i know (maybe once a quarter or something, but seriously) ...
My point is that in the short term, paper investments backed by ANY real estate is EXTREMELY HIGH RISK.
And you do not take on EXTREMELY high risk in your retirement next egg account, EVER!
If he wants to go aggressive that is fine.
Hell, like i said, go for fucking broke and put it all in small cap and domestic growth funds.
But giving money to REITs or any other form of real asset holding fund at this point in time is just downright stupid and suicidal.
If there is going to be upside,
there is going to be upside. Period.
It won't matter if he didn't get in at the absolute ground floor.
But, as the experts say,
"Do you really want to call bottom, and jump in front of this bear freight train?"
"Are you feeling like superman this morning? Are you going to catch that falling knife?"
:cool:
If I opened it now would you not understand?
so you are saying you should always buy high? thats the opposite of the investment advice i've been given.
good advice. over the last 15-20 years the S&P has returned an annualized return of 11% annually. i'll take that any day.
People try to sound all smart & creative, but with the S&P's history & stability, why go against it? I have 50-60% in there with the rest going into other things.
Whenever I take a new job, my first question to HR is, "What fund mimics the S&P 500?"
No.
I'm saying if you see graph going DOWN you don't bet UP, you wait for it to stabilize, "consolidate", "build a base" and "rebound" a bit before you go long.
That's not buying high,
its called not being stupid.
Repeat: Are you trying to catch a falling knife?
Housing prices, pending home numbers, new starts, and so forth are all continuing to fall ...
and you want to tell this man to buy in to that?
Thats just dumb.
If he wants to put money in the stock market, at least they are "TALKING" about that having tested "bottom" twice ... but the smart money knows that another test is coming in the next few months.
The Dow can't get over 12700, and the S&P isn't pushing anywhere close to breaking 1400 these days. Its been stuck at 1380 and falling slowly over the last week or so.
But at least the paper market is a diversified asset class backed by a multitude of facets of our economy.
Putting your money on real estate at this point, is betting your eggs in one basket, and its a basket with a hole in the bottom right now.
That ALL i'm saying.
You don't go long when every indicator is negative.
If I opened it now would you not understand?
Here is a bit of reality for you.
Don't forget to "inflation adjust" any gains rate you are claiming.
inflation adjusted DJIA returns... remember the S&P nearly identicaly mimics the DJIA.
True gains of around 1.9% per annum ... and even with the 2% this guy has tacked on to the government CPI numbers, that is STILL conservative.
The reality is the bubble HAS burst, and though we may try to push it back up short term here (and i'd guess the dow isn't going over 14,000 again regardless anytime approximating soon) ... and the long term outlook for stocks is most probably DOWN.
Just one mans opinion.
But you people who think up is the constant direction are just slightly deluded.
If I opened it now would you not understand?
considering the only thing that could make this market truly go and stay up right now is more inflation ... hedging your investments with gold or silver isn't the dumbest thing you could do.
If you could pick up silver at 17.5 an ounce in the next few weeks youd be getting a steal.
It was at 22 a few weeks ago, before a sharp correction due to a number of factors -- pulled margins at large institutions, profit taking from traders, and government manipulation.
IF shit gets ugly, silver could be at 40-60.
But thats pretty ugly we're talking.
If I opened it now would you not understand?