Did anyone do well on their 401K this round?

Discussion in 'Archived Threads 2001-2004' started by Ted Lee, Jul 24, 2002.

  1. Ted Lee

    Ted Lee Lead Actor

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    aarggh!!!
    after contributing 15% of my paycheck for 3 months, i barely broke even! [​IMG]
    i suppose i can't complain too much. i did well last quarter, but it's still irritating to see my money go down the drain. i know it's a tough time for stocks and my portfolio is semi-aggressive, but still....
    fudge!!! [​IMG]
     
  2. Brian Perry

    Brian Perry Cinematographer

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    I think most of us in stocks have had our butts handed to us.
    Although I did okay today. [​IMG]
     
  3. SteveA

    SteveA Supporting Actor

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    Ted - are you young? If so, the decline in the market is the best thing you could hope for. My 401k portfolio lost 16% last quarter, yet I'm still celebrating. Why? Three words: dollar cost averaging.

    When the market is down, your 401k contributions are buying more shares of stock than when the market is up. When the market goes back up (and it will eventually), your gains are magnified.
     
  4. Ted Lee

    Ted Lee Lead Actor

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    umm...does early 30's count as young? [​IMG] i suppose my new love handles say otherwise, but that's a whole different thread!
    i didn't think about the dollar cost averaging (my financial skills are less-than-stellar) but it does make sense. i know that everyone says you've got to "ride it out" but it sure is tough seeing that hit.
    ugh! [​IMG]
     
  5. Matthew_Millheiser

    Matthew_Millheiser Supporting Actor

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    Remember, unless you're approaching retirement, think long-term. And diversify. Back in 1997, people were scoffing at 7% returns on bonds, CDs, etc.. Now, that would be a frickin' mechiah.
    Over the past 2.5 years, my 401k has retained 75% of the value of all the money I've pumped into it. But I have another 35-40 years or so until retirement. Just hold your nose and ride it out...
     
  6. Colin Dunn

    Colin Dunn Supporting Actor

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    My 401(K)s are down somewhat (probably about 20% since the bear market began), but fortunately, I have avoided a catastrophic loss (so far). The people who lost their entire 401(K) are usually ones who dumped it all into a single company stock. No matter how much you may believe in your employer's business prospects, I say: cover your @$$ and diversify. All the stock-based mutual funds took a hit, and the bond funds offset some of those losses.
    I'm more worried about LAYOFFS than losing a few % of my 401(K) funds. Already lost my job once (this former employer's stock is now down 90% from its peak), though I bounced back into another job after 2.5 months. But even now, it seems like almost every day, another tech company announces several thousand more people will get the ax. Already, there is no place for all the unemployed techies to go ... but companies just keep throwing more and more people out. [​IMG] [​IMG] [​IMG]
     
  7. Philip Hamm

    Philip Hamm Lead Actor

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  8. SteveA

    SteveA Supporting Actor

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    Yes Ted, early 30's counts as "young"! Anyone who still has several decades until retirement should definitely be heavily invested in stocks, in my opinion. You have plenty of time to ride out the ups and downs in the market.
     
  9. Thomas Reagan

    Thomas Reagan Stunt Coordinator

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    Steve is right. If you've got 20-30 years before retirement, look at the change in the number of shares you have as opposed to the portfolio balance.

    Thos.
     
  10. Marvin

    Marvin Screenwriter

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    In the words of some commercial I heard on the radio, my 401K is now a 201K.

    I expect that it will once again be a 401K by the time I'm able to use it.
     
  11. Jim_F

    Jim_F Screenwriter

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    I'm hoping that mid-40s counts as young after what's been happening with my TSA!
     
  12. Patrick Sun

    Patrick Sun Moderator
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    One guy in my office made some money on his 401 in the past 6 months, but it was sort of accidental in that he never moved his money out of the "stable value" fund, and it's made just a little bit of money, but it didn't lose any, so he was grateful. Over the long run, he may be cheating himself, but it's almost as safe as stuffing your mattress with money.
     
  13. Philip Hamm

    Philip Hamm Lead Actor

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  14. Ted Lee

    Ted Lee Lead Actor

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  15. SteveA

    SteveA Supporting Actor

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    One important thing to remember when picking stock funds is diversification. You want to avoid owning the same stocks in multiple funds, if possible. Try to mix up your funds according to the stock sectors they target. For instance, you might want to have one fund that consists of small-cap stocks, another fund that has large-caps, an international fund, and maybe an index fund. Even if you go entirely with stocks, you should still spread the risk around this way.

    Rebalancing your holdings periodically is also important. For example, if you allocate 25% of your 401k to tech stocks and then next year your tech stocks are worth 50% of your total portfolio value, you need to rebalance to bring your tech holdings back down to 25%. That way, if tech should bomb (like the last couple of years), your losses are minimized.
     

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