investing in 401k

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kizhar's picture
kizhar
Status: Member (Offline)
Joined: Nov 22 2008
Posts: 1
investing in 401k

Hi,

Please let me know if it is vise to keep investing money to 401K? should I stop contributing to 401K? I am 44 years old, and able to see the failures of economy .... it looks like I have lost majority of my money and the downfall seems to be very fast.

Please advise!

Thx, 

Kouser 

foxdia's picture
foxdia
Status: Member (Offline)
Joined: Nov 22 2008
Posts: 1
Re: investing in 401k

Granted, I am NOT a financial planner and I never trusted the "Market", so putting more money into an already faltering system seems unwise to me.   In my little corner of the world, what I hear is people are having
difficulty getting the money they need to move forward and be
productive.  Rather than giving my money to someone to put into a portfolio of undetermined risk, I prefer to invest in something local and something sustainable with all its risks: win, lose, or break even.  I'd rather take the risk along with my local farmers to supply your community with a healthy alternative to having the majority of our food being trucked in from who knows where or helping a young person with the start up capitol to get their business off the ground.  But, that's just me.  In the end, you're the one who'll have to decide what your willing to put your money into.

 

D

mainecooncat's picture
mainecooncat
Status: Gold Member (Offline)
Joined: Sep 7 2008
Posts: 488
Re: investing in 401k
foxdia wrote:

Granted, I am NOT a financial planner and I never trusted the "Market", so putting more money into an already faltering system seems unwise to me.   In my little corner of the world, what I hear is people are having difficulty getting the money they need to move forward and be productive.  Rather than giving my money to someone to put into a portfolio of undetermined risk, I prefer to invest in something local and something sustainable with all its risks: win, lose, or break even.  I'd rather take the risk along with my local farmers to supply your community with a healthy alternative to having the majority of our food being trucked in from who knows where or helping a young person with the start up capitol to get their business off the ground.  But, that's just me.  In the end, you're the one who'll have to decide what your willing to put your money into.

 

D

Your comments are a breath of fresh air and mature reasoning that sweep down over me like cool winds off snow-covered, spring moutain tops.

This perspective is sorely needed on this website, especially this part, "so putting more money into an already faltering system seems unwise to me." Fancy that logic.

"I prefer to invest in something local and something sustainable with all its risks..."

Brilliant. I see that you care, and that gives me hope.

If I read about one more person speculating about how to "profit off the downturn" or cooking up the next big scam to make money off others' pain, I'm signin' up for the Taliban.

jrovins's picture
jrovins
Status: Member (Offline)
Joined: Sep 23 2008
Posts: 3
Re: investing in 401k

The Practical & Tactical approach:

I am not a finacial advisor either, but this is what I have been doing.

First step, channel any fresh money you are contributing into the safest investments your 401K has to offer, stop adding to any stock funds, only add to very safe bond funds, or money market funds, (High yield bond funds are not safe bond funds).

There may come a time when things like company match & the tax deferrals are no longer as important to me, then I would cease contributing to my 401K. Currently I am not at that point yet.

As for the existing money that is already invested in the typical mutual fund crap, if you haven't done so already, start shifting it over to safer stuff, but not all at once, unless you are in total panic mode. When you are shifting things,remember you are locking in current losses, so shift 1/3 ASAP, and then wait a bit for a "suckers rally" or a rare day when the bad news is not strong enough to drive the markets lower. and then shift an other 1/3 of your un-safe stuff over to safe stuff.  there may be a time in the next few months when the Dow gets up into the mid 8000's  or higher, if that happens, dump the rest of your risky stuff.

When you sell mutial funds, they are priced out at the end of the trading day, so if the market is up in the middle of the day, and you decide to sell, you get cashed out on the closing prices of the day. I have noticed that the stock markets recently have been taking a dive around closing time, this is from prople bailing out of stock funds, like rats leaving a sinking ship.  Fri Nov 21 was the first time in a while that we closed up, so Monday could be a good day to dump more stock funds. ( I am doing this for Monday).

So much for the short term tactics. Next step, Mid Term:

Check to see if there is a way for you to switch out a large chunk of money from your 401 K into an IRA, you will have better controll over it that way. if you can get switch it without penelitys, begin researching a self-directed IRA, you can have things like gold & realestate in this type of IRA.  it is a good time to convert investments into gold, because it is still relatively cheep, and won't stay that way for much longer. Choose a company you trust to handle your account.

Long term:

After things are done hitting the fan, and start to stabilize,  If there is still a stock market to invest in, I may do so, but we may be better off taking Foxdia's suggestion, and investing in our local communities.

~j

 

 

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