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Message
Changing 401k investments to avoid losses
Posted on 8/15/13 at 11:17 am
Posted on 8/15/13 at 11:17 am
Hello all,
Looking for some advice on my 401k investments. Most are in high risk Equity funds that have good rates of return (except for a few years ago).
I am a believer that we are in for another market bust as soon a QE tapers off.
I would like to avoid having my retirement investments cut in half again.
I've looked into some gold backed IRAs but it seems like the fees are pretty steep. I would think the Gold bubble would burst eventually also.
I'm in my 40's and have time to ride the ups and downs in the market but maybe there is a smarter move? Maybe not?
Thanks in advance.
Looking for some advice on my 401k investments. Most are in high risk Equity funds that have good rates of return (except for a few years ago).
I am a believer that we are in for another market bust as soon a QE tapers off.
I would like to avoid having my retirement investments cut in half again.
I've looked into some gold backed IRAs but it seems like the fees are pretty steep. I would think the Gold bubble would burst eventually also.
I'm in my 40's and have time to ride the ups and downs in the market but maybe there is a smarter move? Maybe not?
Thanks in advance.
3
Posted on 8/15/13 at 11:45 am to AndyCBR
A couple of quick thoughts here...
Let me be clear, there is only one way to avoid losses and that is not to invest money in anything other than a government backed treasury notes and "risk free" securities. Incidentally, as an investment these offer probably the lowest rate or return you could possibly achieve.
You need to evaluate your own level of risk aversion. Based on what you've stated here I'd say your level of aversion is higher than your portfolio choices would indicate.
Investing is not about "timing the market" or quick gains. Its about portfolio diversification and "time in the market".
Let me be clear, there is only one way to avoid losses and that is not to invest money in anything other than a government backed treasury notes and "risk free" securities. Incidentally, as an investment these offer probably the lowest rate or return you could possibly achieve.
You need to evaluate your own level of risk aversion. Based on what you've stated here I'd say your level of aversion is higher than your portfolio choices would indicate.
Investing is not about "timing the market" or quick gains. Its about portfolio diversification and "time in the market".
This post was edited on 8/15/13 at 11:49 am
Posted on 8/15/13 at 12:16 pm to AndyCBR
quote:
I've looked into some gold backed IRAs but it seems like the fees are pretty steep. I would think the Gold bubble would burst eventually also.
Making moves in and out of the market in a 401K is STUPID. Not saying you're stupid, but as you said yourself:
I'm in my 40's and have time to ride the ups and downs in the market
Then stop worrying, give yourself a break and enjoy the ride.
quote:
I would like to avoid having my retirement investments cut in half again.
It wasn't cut in half unless you panicked and sold everything during the crisis. If you left everything alone in the market, you have not only regain every penny you lost, you're up over 50% since March 1, 2009, and if you were buying during the downturn and at the bottom, you're up considerably more than that.
Stay the course, it works.
Posted on 8/15/13 at 2:23 pm to Vols&Shaft83
I'm with the OP and am considering moving some of my portfolio into more stable funds. I wont change my future contributions (i.e. I'll still buy the same funds, thus if the market does go down I'm buying at a lower cost), but I am going to re-distribute some of my current holdings into a stable fund that is almost essentially a cash fund- I think it's technically a stable bond fund. It doesnt move much, but thats better than watching my current holdings drop like a rock during the big dip.
Posted on 8/15/13 at 7:22 pm to Vols&Shaft83
quote:
It wasn't cut in half unless you panicked and sold everything during the crisis.
this
Posted on 8/15/13 at 9:21 pm to AndyCBR
Not giving advice, but if you are determined to make changes to your 401K portfolio, you need to find out how much it is going to cost to sell.
What are the fees? and How much is it going to cost when you go back in? Where you going to park it while you wait out the market?
What are the fees? and How much is it going to cost when you go back in? Where you going to park it while you wait out the market?
Posted on 8/16/13 at 12:11 am to wiltznucs
quote:
there is only one way to avoid losses and that is not to invest money in anything other than a government backed treasury notes and "risk free" securities
There are times when that doesn't work out well either, fwiw. In this context, "risk free" just means you'll likely get dollars back. Whether the rate of return keeps up with inflation is another question.
quote:
It wasn't cut in half unless you panicked and sold everything during the crisis. If you left everything alone in the market, you have not only regain every penny you lost, you're up over 50% since March 1, 2009, and if you were buying during the downturn and at the bottom, you're up considerably more than that.
Stay the course, it works.
I did this myself, and yes it does work.
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