The Market took off yesterday.... Help!!!


Mike

Mike

Ace Dawg! RQQ!!!!
Please help me understand my 401k plan. I'm trying to make it grow like a mugg. Can anyone offer any good advise? I'm trying to understand whether or not I'm making the right decision, but I'm lost.

I know stock a little, but some of this stuff is confusing. Help me if you can....:(
 
U & me both

The best thing I've heard about your 401k plan is to put as much contribution into it as possible and let it stay there!! Don't cash out, don't take out loans on it, don't move it too much. The whole point of it is to give it time to grow in the long run. My 401k plans sucks badly for the end of 2001 - beginning of 2002. But it will eventually grow again in the long run.

Decent 401k plans will have multiple stock & fund options. I'd say talk to a financial planner/advisor from your 401k company to see what would be a good mix for your situation in life. For example, I'm single & young (less than 30), so right now it's really all about getting as much growth from the funds as possible. So I'm heavily stock related, but there are some safer investments in there too (bonds). A person who has children may want a different type of investment; also a person who is older & closer to retirement. But the main thing is get a plan and stick with it, checking it on maybe an annual basis to make sure it still agrees with your goals.
 

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Thanks!

That means I'm doing the right things. I check my plan after every contribution to see where it is going. When the market was down I was still grabbing shares and now that the take off happened yesterday, I'm sitting on a pretty nice stash.

I'm not that old, so I got my funds split up. It's kinda High Cap heavy, but I do have money going into bonds for preparing to send the youngsters to college.

Do you have any input on the NAVs or anything else I need to watch for. The scariest thing is looking at some stocks history. But, I'm told most stocks look that way. You know, it reflects the down times eventhough it may not be much. To the unknowledgeable, it looks like your shares are no good.
 
The key is to diversify. Our 401k at my company allow us to break out plan into parts. Mine is currently broken into for parts
a large portion in the stock market(that is a fast gorwth mutual fund) a smaller ortion in a slow growth mutual fund. I have small portion in foriegn stocks.
 
sounds like you already know!

Like I said, I'm not very knowledgeable myself, but one thing that's stuck with me is to look at the long run and (as hard as it may be) not dwell so heavily on the everyday activity. For NAV, I'd say take a look at it over the lifetime of the stock or fund. There are always upswings & downswings (some worse than others), but see how it's performed over the long run.

I really need to evaluate mine - took a MAJOR hit with the most recent downturn in the market. But now it's on an upswing, huh? Lately, I haven't bothered to look cause I start pulling hair out I ain't got :D But I'll have to see what's going on now. Definitely good to know what's going on with your investments, but don't let 'em worry you.

Wait a sec - MIKE: you got younguns already!!! Go 'head, man! I think you remember my brother (Eric) - he & the Mrs. just got their first child last Friday, a girl. Oh, ya boy is beaming! I'll have to make sure he's handling things financially for her future, too. :tup:
 
Re: Thanks!

Originally posted by Mike
That means I'm doing the right things. I check my plan after every contribution to see where it is going. When the market was down I was still grabbing shares and now that the take off happened yesterday, I'm sitting on a pretty nice stash.

I'm not that old, so I got my funds split up. It's kinda High Cap heavy, but I do have money going into bonds for preparing to send the youngsters to college.

Do you have any input on the NAVs or anything else I need to watch for. The scariest thing is looking at some stocks history. But, I'm told most stocks look that way. You know, it reflects the down times eventhough it may not be much. To the unknowledgeable, it looks like your shares are no good.
Click to expand...
I was to told to not worry to much about stock changes and stuff and to not move your stocks around to much. The reason being is that you can't touch this money until you are 59 ? years old. So why are you stressing about it because the market in going to change many many times. Longterm growth is the key.
 
Aight...my take!!!

I have to clue you guys in on a couple of things. The 401(k) USED to be the way to go, but since the Enron mess, the emphasis has been on GROWTH and DISPOSABLE CASH!!! That's right.

Now let's look at your 401(k) plans, you max out and your company matches to a point. What you should do is invest up to the point the company matches and NOT ONE PENNY MORE!!! Why?? The key is to utilize YOUR money to the utmost. If it is tied up in a retirement fund, you will be penalized TWICE... once for taxes (because most of us contribute pre-tax) and the 2nd for early withdrawal from a designated retirement fund. How much sense does this make?

I just went round and round with my financial adviser on this same issue and here is what we agreed on....

1) I want to move money around without penalties.
2) I need some tax free money.
3) I want to diversify.
4) I don't want to be rich, but heyyyy....
5) I have goals, short term and long term.
6) I don't wanna work past 55 if I can help it.

So we built a pyramid ...

Growth funds
Disposable income
Retirement

That is it in short, laymen's terms...

In Growth funds, you look at variable annuities, stocks, mutual funds. These things you can cash in and only have to worry about capital gains. Time to access is usually 1 to 2 days. Drawbacks? You may have no options on the EFT from your bank account.

Disposable income is the good ol checkbook. Gotta have money to roll with the necessities of life, so that means consolidating those credit cards, eating at home and living on a budget. Try to maintain a paycheck in excess in that bad boy!!! Also, utilize those 6-month-no-interest credit card transfers. Drawback??? Remembering to transfer to another interest free account after the 6 months.

Retirement can be what ever you want to designate as retirement in addition to your 401(k) plan. Those stocks you bought in an investment club or given as a gift, savings bonds, etc. There are ways to make that dollar work for you!!! Drawback??? You can't get it right away and without paying a penalty.

Best thing is you guys are young. The earlier you start, the better it will be for you. Establish those budgets and don't blow it!!! Plan those road trips and football games well in advance and
keep them in mind.

Start off by listing your monthly bills, looking at your tax rates on your W-4's (I withhold at a higher single rate...guaranteed a refund at year's end...don't let anyone talk that foolishness bout the gov't keeping your $$ tax-free. Think about it...you'd spend that extra $100/month on something silly and not even remember what it was!) Take that refund and buy some stock, put extra money on your mortgage principal, etc.

As far as stocks? Look at making selections based upon the conservative approach of the National Association of Investors Corp (NAIC). They use a sort of 5-year program in which they look at achieving a 15% return. It works pretty good with a 25% small, 50% med and 25% large diverse portfolio. Small caps fluctuate wildly and can become big winners or dogs, mid caps tend to rise at a pronounced rate and the large caps are pretty steady. This pretty much evens out when you look at the portfolio as a whole.

Think BIG and think LONG TERM. Growth is the way to go, but DIVERSIFY!!!!!
 
Mike: When things get settled down, please look at my new 401k. As soon as I can, I will rollover my old 401k to this plan.

Jag Diehard: You've said a mouthful.
 
Done Deal!

Originally posted by Ms. Jag4Jag
Mike: When things get settled down, please look at my new 401k. As soon as I can, I will rollover my old 401k to this plan.

Jag Diehard: You've said a mouthful.
Click to expand...

Anyone have some good advice on IRAs? I'm hoping we can put some money into that, what are the ins and outs as you see them?
 
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