Anyone into 401k shit?

eekamouse
eekamouse Posts: 267
edited April 2008 in A Moving Train
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?

:)
Love is more important to me than faith.
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Comments

  • jcfranz
    jcfranz Posts: 168
    eekamouse wrote:
    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?

    :)

    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
    It's easy to grin, When your ship comes in, And you've got the stock market beat. But the man worthwhile, Is the man who can smile, When his shorts are too tight in the seat
  • unsung
    unsung I stopped by on March 7 2024. First time in many years, had to update payment info. Hope all is well. Politicians suck. Bye. Posts: 9,487
    I have a 401k. I'd also recommend starting a personal Roth IRA if you can. Max out your contribution and you will love it when it comes time to retire.
  • know1
    know1 Posts: 6,801
    When I pick mutual funds, I look for the ones that have the best return over the longest period of time. If a fund hasn't been around for 10 years, I do not touch it.

    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).
    The only people we should try to get even with...
    ...are those who've helped us.

    Right 'round the corner could be bigger than ourselves.
  • know1
    know1 Posts: 6,801
    unsung wrote:
    I have a 401k. I'd also recommend starting a personal Roth IRA if you can. Max out your contribution and you will love it when it comes time to retire.

    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.
    The only people we should try to get even with...
    ...are those who've helped us.

    Right 'round the corner could be bigger than ourselves.
  • DriftingByTheStorm
    DriftingByTheStorm Posts: 8,684
    stay away from that real estate fund!
    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 was to smile and I held out my hand
    If I opened it now would you not understand?
  • eekamouse
    eekamouse Posts: 267
    Thanks for the insight. I have also ready where you can diversify yourself too much.

    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.
    Love is more important to me than faith.
  • DriftingByTheStorm
    DriftingByTheStorm Posts: 8,684
    eekamouse wrote:
    Thanks for the insight. I have also ready where you can diversify yourself too much.

    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 was to smile and I held out my hand
    If I opened it now would you not understand?
  • Number 18
    Number 18 Posts: 132
    Before you "diversify," you also have to ask yourself how risk averse you are. You're only 31, so you should be willing to take on more risk v. if you were 65 and about to retire.

    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. ;)
  • eekamouse
    eekamouse Posts: 267
    Ya. I figure the market may not be at the bottom, but it should be "close". If everything tanks so bad anyway, what the fuck difference will it make =p

    Drifting, my employer is 50% matching :)
    Love is more important to me than faith.
  • PJ_Saluki
    PJ_Saluki Posts: 1,006
    I'm worth whatever is in my checking account and wallet and how much of my credit limit there is on my one card. Pathetic, broke loser.
    "Almost all those politicians took money from Enron, and there they are holding hearings. That's like O.J. Simpson getting in the Rae Carruth jury pool." -- Charles Barkley
  • DriftingByTheStorm
    DriftingByTheStorm Posts: 8,684
    Number 18 wrote:
    Of course, this does require that you think the market will go back up. ;)

    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 was to smile and I held out my hand
    If I opened it now would you not understand?
  • slightofjeff
    slightofjeff Posts: 7,762
    DriftingByTheStorm wrote:
    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.
    :(

    Jesus dude ... have you built your bunker yet? ;)
    everybody wants the most they can possibly get
    for the least they could possibly do
  • eekamouse
    eekamouse Posts: 267
    I don't know about 10 years. But the Fed agrees with Drifting...omg *croak*

    http://money.cnn.com/2008/04/08/news/economy/fed_minutes/index.htm?cnn=yes
    Love is more important to me than faith.
  • Hollerman
    Hollerman Posts: 41
    eekamouse wrote:
    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?

    :)

    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.
  • DriftingByTheStorm
    DriftingByTheStorm Posts: 8,684
    eekamouse wrote:
    I don't know about 10 years. But the Fed agrees with Drifting...omg *croak*

    http://money.cnn.com/2008/04/08/news/economy/fed_minutes/index.htm?cnn=yes

    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.

    :D

    Okay, i'm done.
    Sorry, drinkin the Ezra Brooks again.
    mmm, that smooth sippin whiskey.
    lol
    If I was to smile and I held out my hand
    If I opened it now would you not understand?
  • sweet adeline
    sweet adeline Posts: 2,191
    are you below the phaseout income level so you can fund a roth? does your 401k have a roth feature? depending on your company match and your ability to save, it is generally better to fund a roth ira before your 401k. however, if your company is doing a match that is a different story. in any case, its best to fund both if you are able to do so. that way in retirement, you can diversify your income stream, some money will come to you tax-free (roth) some will come to you as taxable (401k). its another way of reducing your taxes in retirement. for example, if you need $100k to live off of in retirement, rather than taking the whole amount as taxable income, you can split it between 401k and roth dollars so you are only taxed on a portion of it and you can keep yourself in a lower tax bracket.

    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.
  • know1
    know1 Posts: 6,801
    DriftingByTheStorm wrote:
    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.

    :(

    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.
    The only people we should try to get even with...
    ...are those who've helped us.

    Right 'round the corner could be bigger than ourselves.
  • DriftingByTheStorm
    DriftingByTheStorm Posts: 8,684
    know1 wrote:
    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.

    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 was to smile and I held out my hand
    If I opened it now would you not understand?
  • sweet adeline
    sweet adeline Posts: 2,191
    DriftingByTheStorm wrote:
    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.

    :cool:

    so you are saying you should always buy high? thats the opposite of the investment advice i've been given.
  • fanch75
    fanch75 Posts: 3,734
    If unsure, a good option is to put money in whatever Index Fund is mirroring the S&P 500 Index Fund. You may make more or less with other funds, but over the long haul it's kind of hard to go wrong with that one.
    Do you remember Rock & Roll Radio?

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