401K :I'm thinking of doing something drastic

[NY Disney fan]

My 401 is invested pretty conservatively with about 10% risk. I'm invested mainly in large caps with small caps mixed in as well as international (very little). All I do is lose money. I understand that it is the economy and there is nothing I can do. All I want to do is save money at this point without losing what I already have (I have 22 or so years before retirement). Is it wise to just get the company match and then put my savings in a money makret (through Roth IRA)? I'm so tired of losing.

 

[comicguy]

I know it is hard to look at thise statements and see it decrease!!! I thought the same thing with the last downturn, but I stuck it out and things rebounded. When it comes to investments time is your friend!!! I would give it more time(at least a year) and see if things are changing with the markets.

 

[NY Disney fan]

I thought the same thing with the last downturn, but I stuck it out and things rebounded. .

Did you change up your strategy? More risk? Less?

 

[Maggie'sMom]

My 401 is invested pretty conservatively with about 10% risk. I'm invested mainly in large caps with small caps mixed in as well as international (very little). All I do is lose money. I understand that it is the economy and there is nothing I can do. All I want to do is save money at this point without losing what I already have (I have 22 or so years before retirement). Is it wise to just get the company match and then put my savings in a money makret (through Roth IRA)? I'm so tired of losing.

If you are opposed to risk, does your 401K have a safer option, like a money market or something that is very unlikely to lose principal? Mine does and I keep a portion of my 401K funds in it. Or maybe they have an actively managed target retirement date fund where someone else is in charge of the mix of investments so it will best match what you should be doing for your target retirement date? The problem with investing too much in a money market type fund right now is that the returns on them are abysmal. You'd lessen your risk of losing principal, but greatly increasing your chances of missing out on higher returns.

I'm probably about your age and I've seen my account balance plummet a few times due to market forces, but I stay the course with just minor adjustments. I have a mix of small, mid, and large cap stock funds, a bond fund, an international fund, and a fixed income fund. I haven't bothered investing in the target retirement date funds that my employer offers because so far, I've been able to beat their returns by managing my own portfolio within the 401K. I do also have a Roth IRA into which I invest the maximum allowed each year. As of now, I have 100% of that in an S&P Index fund.

 

[Gr8t Fan]

I did the "something drastic" in 2009 -- took all of my $$ from a Target Retirement Fund and put it into a 7 year CD earning 4.26% interest. I don't regret the decision at all. I just cannot tolerate risk and watching my investments lose almost $38,000 over the course of a year was just too much for me. I know that I'll never realize the huge returns that most will make in the stock market, but I'm 100% OK with that. DH and I continue to invest conservatively in our IRA accounts yearly and we'll manage just fine. And, yes, we know that this goes against the conventional wisdom on investing and that's just fine with us.

 

[bettymae1121]

About 18 months agoI put the bulk of my 401k in a bond fund that is one of the investment options. I did 10% last year, not to shabby! This year I'm not doing quite as well, but I'm still making money. Basicly I put all of my existing money at the time into the bond fund but kept new contributions in the most agresive stock fund they have, that way I'm buying stocks cheap when the markets drop.

I'm nervous about Europe, if that all goes to heck it will take the US down with them, no mater what DC does or who wins the election.

 

[RitaE]

My 401 is invested pretty conservatively with about 10% risk. I'm invested mainly in large caps with small caps mixed in as well as international (very little). All I do is lose money. I understand that it is the economy and there is nothing I can do. All I want to do is save money at this point without losing what I already have (I have 22 or so years before retirement). Is it wise to just get the company match and then put my savings in a money makret (through Roth IRA)? I'm so tired of losing.

If that is what you want to do I would bet that your 401K in itself has a money market or Stable Value similar option.

It's hard for me to tell what exactly you are invested in - you say 10% risk, but then you say mainly large cap funds. The market actually hasn't done terribly badly over the last three years. For instance, in 2009 the DOW was around 9500 and today well over 12000. We've certainly had bad weeks and months, but as a trend things have been up.

I myself prefer very low cost index funds or ETFs and keep a mix of stock, bonds, and real estate holdings appropriate for my age. I've avoided our company offered Age Targeted fund because the expense ratios on them are incredibly high.

 

[chimilady]

I'm 100% stocks and I haven't seen a decrease in years. I just looked today in fact! I have double the amount of money I had 18 months ago, so I don't know why anyone would invest so conservatively.

 

[andrews_dad]

daily cost averaging will catch up to you in teh next 22 years. leave it in 401K with teh match. you are buying more stocks with each dip in the market. With 22 years left you dont want the market to sky rocket now. you want to gather up lots of shares now and have it pop upward down the road.

 

[andrews_dad]

I did the "something drastic" in 2009 -- took all of my $$ from a Target Retirement Fund and put it into a 7 year CD earning 4.26% interest. I don't regret the decision at all. I just cannot tolerate risk and watching my investments lose almost $38,000 over the course of a year was just too much for me. I know that I'll never realize the huge returns that most will make in the stock market, but I'm 100% OK with that. DH and I continue to invest conservatively in our IRA accounts yearly and we'll manage just fine. And, yes, we know that this goes against the conventional wisdom on investing and that's just fine with us.

Unless you are close to retirement, I think you are leaving ALOT of $$ on the table that could have been in teh pocket.

 

[Karenj2]

What I always try to remember is that it's only money lost when you take it out - you ARE still buying stock, and if/when it goes up, so will your money when you actually DO take it out!

If you really have 22 years, I would continue what you're doing... That being said, I have my 401k through Vanguard, and they have a mutual fund that's supposed to change over time - starting off more aggressively, then getting more conservative as you get closer to retirement. You might want to check that out.

 

[ilovemk76]

My 401 is invested pretty conservatively with about 10% risk. I'm invested mainly in large caps with small caps mixed in as well as international (very little). All I do is lose money. I understand that it is the economy and there is nothing I can do. All I want to do is save money at this point without losing what I already have (I have 22 or so years before retirement). Is it wise to just get the company match and then put my savings in a money makret (through Roth IRA)? I'm so tired of losing.

Do you have a retirement plan? That is where you need to start. You need to figure out how much you will need in retirement to live the standard of licit you want. Then you need to figure out how much you have to accumulate to be able to fund your retirement. Then you figure out how much you need to save and how much you will need to earn each year on your investments to get you to that goal.

 

[mikehn]

Doing something drastic is the worst thing you can do. The second worse thing you can do is get financial advice on the internet.

 

[NY Disney fan]

Doing something drastic is the worst thing you can do. The second worse thing you can do is get financial advice on the internet.

Was that really necessary or helpful?

 

[Gr8t Fan]

Unless you are close to retirement, I think you are leaving ALOT of $$ on the table that could have been in teh pocket.

But I sleep SOOOO much better at night knowing that my principal is safe. As I said above, I realize that I did the exact opposite of what all of the gurus say I should do, but that suits me just fine.

 

[jessrose18]

if you follow susie orman she says stock market down =your money buys more shares of stocks= when the market comes back you get more in the long run...

 

[Miffy]

OP--

Just know this: investing is gambling. It's not scientific and it's not predictable, except in hindsight.

If you don't want to gamble with your hard-earned money, stop listening to the advice of experts (most of whom got the 2008 crash and the 4 crashes before that all wrong). Do what you feel comfortable and secure doing. You are the one earning the money. Better to spend your money at Disney (or doing anything else you love) than to watch it disappear in so-called investments.

And don't listen to me, either. Listen to yourself.

 

[eliza61]

My 401 is invested pretty conservatively with about 10% risk. I'm invested mainly in large caps with small caps mixed in as well as international (very little). All I do is lose money. I understand that it is the economy and there is nothing I can do. All I want to do is save money at this point without losing what I already have (I have 22 or so years before retirement). Is it wise to just get the company match and then put my savings in a money makret (through Roth IRA)? I'm so tired of losing.

If you really can't tolerate risk then you need to move your money simply for peace of mind. but if you've got 22 years of working left no way, no how should you be worrying about this blip.

between 2000 and 2011 the s& p investment return has been some thing like 4% even with the 30% loss in 2008. Now if you go back to 1995 (15 years) and the return jumps to almost 10%

Look at the returns on your investments over a couple of periods. my company is with merril lynch and each fund allows me to look at this last quater, last year, 5, 10 and inception returns.
my small caps is down about 1.7% this half year but over a 1 year period it's up about 3% over a 5 year period the return was 6%

With 22 years to go, chances are very good that you will have more growth than losses overall

My total rate of return this year so far is +5%. better thanwhat you would do in a money market.

How often are you checking the thing? tip, never watch the stock market. invest it and leave it alone. maybe every 6 monts review. If you check it at every paycheck you'll get seasick.

http://observationsandnotes.blogspot.com/2009/03/average-annual-stock-market-return.html

 

[cornflake]

OP--

Just know this: investing is gambling. It's not scientific and it's not predictable, except in hindsight.

If you don't want to gamble with your hard-earned money, stop listening to the advice of experts (most of whom got the 2008 crash and the 4 crashes before that all wrong). Do what you feel comfortable and secure doing. You are the one earning the money. Better to spend your money at Disney (or doing anything else you love) than to watch it disappear in so-called investments.

And don't listen to me, either. Listen to yourself.

It's not gambling. Gambling is pure chance.

The stock market is not chance, it's motivated by specific factors that you can see and study, plus human reaction, which is no, not predictable.

However, if you look at the life of the market, it has, over time, always gone up. If someone doesn't want to invest in the market that's fine but I don't think dismissing investing (and investing covers plenty of things besides the market as well) as gambling is helpful or fair really.

 

[Lucky4me]

dh was forced into an early retirement. We took his savings out of the stock market and into something safe- seeing returns of 6% and zero risk of losing money. Haven't needed to use any of it so far, but may need to within a couple of years.
We have kept my retirement savings in the market. It's not as much, so feel comfortable if we lose some or even all of it.

If I had 22 years to retirement, I'd leave it in there and look at the numbers once a year.