tOfficial "How much has your 401 lost YTD??" thread

[Vlad_the_Impaler]

12%

[New User]

Im down -8%

hope and change is coming my way!

[lars]

Who cares. It's a 401K thats a LONG TERM investment. Unless you're planning to take the money out right now it doesn't matter. The stock market goes up and down. Its the value of your 401K when you retire that matters. If you're properly diversified in total stock market allocations then I know one thing for sure that the value of the market will be far more than it is today in 10, 20 or 30 years. Bank on it. Come back in 20 years and ask us whether your 401k is worth more or less compared to today.So long as you are well diversified in total stock market funds or indexes you will be fine. If you are not well diversified or in some bad performing mutual funds with high fees..now is a great time to reallocate into total stock market index funds.

[Vlad_the_Impaler]

Originally Posted by lars

Who cares. It's a 401K thats a LONG TERM investment. Unless you're planning to take the money out right now it doesn't matter. The stock market goes up and down. Its the value of your 401K when you retire that matters. If you're properly diversified in total stock market allocations then I know one thing for sure that the value of the market will be far more than it is today in 10, 20 or 30 years. Bank on it. Come back in 20 years and ask us whether your 401k is worth more or less compared to today.So long as you are well diversified in total stock market funds or indexes you will be fine. If you are not well diversified or in some bad performing mutual funds with high fees..now is a great time to reallocate into total stock market index funds.

Thanks for the lecture and re-stating the obvious. Yes, 401s are for the long term, but that doesn't mean a 12% drop in 8 months doesn't hurt. It's going to take a long time to get back to where we were, AND THAT IS TIME LOST FROM HOWEVER MANY YEARS YOU HAVE UNTIL RETIREMENT.

Ok, now let's see much you REALLY know...

What should a well-diversified portfolio look like for someone who has 20 years to go? My current allocaitons are something like this, starting with most conservative and ending with most aggressive:

10% in stable value
20% in bonds
35% in S&P 500 index
10% in US midcaps
25% in international equity (emerging mkts and Europe)

What do you think?

[Tag]

I've been between +.2% and -7.4% in the last six months or so. As of end-of-day yesterday, I'm at -5.2%. I could be happier. Still, with at least 30 years before retirement I'm not extremely concerned.

[Papa Chubby]

Originally Posted by Vlad_the_Impaler

Thanks for the lecture and re-stating the obvious. Yes, 401s are for the long term, but that doesn't mean a 12% drop in 8 months doesn't hurt. It's going to take a long time to get back to where we were, AND THAT IS TIME LOST FROM HOWEVER MANY YEARS YOU HAVE UNTIL RETIREMENT.

Ok, now let's see much you REALLY know...

What should a well-diversified portfolio look like for someone who has 20 years to go? My current allocaitons are something like this, starting with most conservative and ending with most aggressive:

10% in stable value
20% in bonds
35% in S&P 500 index
10% in US midcaps
25% in international equity (emerging mkts and Europe)

What do you think?

I would be fully invested in equities with a 20 year horizon. Although you will want to start drawing down in 20 years, most of your investment probably won't be required for 30, 40 or even 50 years. Conventional wisdowm has changed to a more aggressive strategy in these circumstances.

Also, I don't invest internationally. But that's because I'm an isolationist.

My IRA is down 3% this year. I'm doing just fine.

[Todd Farkman]

I've been nothing but positive since 2001. I moved out of the stock market a long time ago. CDs, money markets and precious metals. I don't have the time or energy to figure out which stock market vehicle i need to be in to make money. And bonds can be just as bad.

[lars]

Originally Posted by Vlad_the_Impaler

Thanks for the lecture and re-stating the obvious. Yes, 401s are for the long term, but that doesn't mean a 12% drop in 8 months doesn't hurt. It's going to take a long time to get back to where we were, AND THAT IS TIME LOST FROM HOWEVER MANY YEARS YOU HAVE UNTIL RETIREMENT.

Ok, now let's see much you REALLY know...

What should a well-diversified portfolio look like for someone who has 20 years to go? My current allocaitons are something like this, starting with most conservative and ending with most aggressive:

10% in stable value
20% in bonds
35% in S&P 500 index
10% in US midcaps
25% in international equity (emerging mkts and Europe)

What do you think?

Well..its pretty hard to say by 'categories'. Any 'category' fund could be lousy investment. What are the fees they charge?..how is the performance over 10-20 years? I prefer to be in Index funds or Total stock market funds (then you own the market) which is predictible long term and has very low fees and high diversification. Why do you own bonds?? Unless you are in looking for income..bonds suck. International is good...but it all depends on the fund. So overall..this looks like it could be a pretty poor performing portfolio.

But again..you miss the overall point. You can't judge a portfolio with a long term goal by a moment in time. In 2000 the Dow was at 7800...and now its 11,800 or so. At 7800 you would be complaining but it all came back and in 10 years I bet the dow and the total stock market will be well above 11,800. Historically this is very consistent. So if you have a long-term perspective ..you dont worry about the ups and down of the market because you know that in 10-20 years it will be far higher. If you have a short-term (trading) perspective and only want to try to take profit and not have any down ticks then you shouldn't be in mutual funds at all. You should be a day-trader.

If you want safe returns and no loss in your portofolio at any time. The you shouldn't even be in stocks. You should just own CDs, Treasuries or for a little down side bonds. But then your long term returns will likely be much less.

Sounds like you don't have much risk tolerance and you should re-evaluate what % of your investments you want to have in stocks. Because in stocks its a GIVEN that you will lose value at some points during a long term investment. But the overall trend is very likely to rise (given you take a total market perspective). If you pick and choose sectors or specific stock you are decreasing your odds of long term gains..if you are passive in investing.

[Spartytruth]

12%

But I figure since I buy in weekely and dollar cost average over time, I'll be fine barring at otal collapse.

Diversified a little but given that I am 41 I figure I'll stick with my riskier growth funds.

[Vlad_the_Impaler]

Originally Posted by lars

Well..its pretty hard to say by 'categories'. Any 'category' fund could be lousy investment. What are the fees they charge?..how is the performance over 10-20 years? I prefer to be in Index funds or Total stock market funds (then you own the market) which is predictible long term and has very low fees and high diversification.

About 90% of my total portfolio is in index funds (I just didn't want to get that detailed in my post). The only difference is that you're talking about "total market index", and I'm talking about index funds by category-type.

[Feckweed]

Originally Posted by Vlad_the_Impaler

Thanks for the lecture and re-stating the obvious. Yes, 401s are for the long term, but that doesn't mean a 12% drop in 8 months doesn't hurt. It's going to take a long time to get back to where we were, AND THAT IS TIME LOST FROM HOWEVER MANY YEARS YOU HAVE UNTIL RETIREMENT.

Ok, now let's see much you REALLY know...

What should a well-diversified portfolio look like for someone who has 20 years to go? My current allocaitons are something like this, starting with most conservative and ending with most aggressive:

10% in stable value
20% in bonds
35% in S&P 500 index
10% in US midcaps
25% in international equity (emerging mkts and Europe)

What do you think?

Honestly, you don't have a clue as to what you're doing....only a fool doesn't hold small caps in his 401K

[Vlad_the_Impaler]

Originally Posted by Spartytruth

12%

But I figure since I buy in weekely and dollar cost average over time, I'll be fine barring at otal collapse.

It is a pretty good time for some dollar cost averaging, isn't it. That's why I'm leaning towards staying put.

[FishHead]

I don't remember how many 401k's I have, so I am not sure.

[Spartytruth]

Originally Posted by Feckweed

Honestly, you don't have a clue as to what you're doing....only a fool doesn't hold small caps in his 401K

Originally Posted by Vlad_the_Impaler

It is a pretty good time for some dollar cost averaging, isn't it. That's why I'm leaning towards staying put.

What is a small cap? I note that I have quite a bit in them.

As for DCA - they say its the way to look at it.

[Vlad_the_Impaler]

Originally Posted by Spartytruth

What is a small cap? I note that I have quite a bit in them.

Companies with small market caps.

[Spartytruth]

Originally Posted by Vlad_the_Impaler

Companies with small market caps.

Clear as mud.

[Vlad_the_Impaler]

Seriously, I'm thinking of transferring everything into a target-date fund, like the BCG-2030 or something. Advantages:

1. Let the pros handle the investment/mix decisions.
2. Model is based on mix changing as you get closer to retirement.
3. All investments within the fund are index-based.
4. Very low cost (around 0.15%).
5. Takes the headache out of having to rebalance/analyze every year.

[Vlad_the_Impaler]

Originally Posted by Spartytruth

Clear as mud.

Companies who's market capitalization value is between $250MM and $2B.

[DeHannen]

Originally Posted by Vlad_the_Impaler

10% in stable value
20% in bonds
35% in S&P 500 index
10% in US midcaps
25% in international equity (emerging mkts and Europe)

What do you think?

The following investment advice is only an opinion, future returns are not guaranteed based on past performance.

With 20 years to go:

Get the F*** out of bonds man. Inflation will kill the real returns in the bond market.
Increase US midcaps to 25%, lower SP 500 index to no more than 25%
You need exposure to commodities and a hedge against inflation, try GCC
It wouldn't hurt to keep 5% in precious metals.

[Golfnut]

22% whatever, still up 25% in three years.

[SBSpartan]

If watching the thing move down in the short term, or you want to weather a bit of a down market why not put your money in the most stable area? Bonds don't move much one way or the other. You will likely go down, just not as much. Once things start moving again, switch to the funds that will likely yield more.

[lars]

Originally Posted by Vlad_the_Impaler

Seriously, I'm thinking of transferring everything into a target-date fund, like the BCG-2030 or something. Advantages:

1. Let the pros handle the investment/mix decisions.
2. Model is based on mix changing as you get closer to retirement.
3. All investments within the fund are index-based.
4. Very low cost (around 0.15%).
5. Takes the headache out of having to rebalance/analyze every year.

Thats not a terrible strategy. You might want to keep a small amount in commodities as others suggested. But this should give you low costs and diversification. I would check to see if that fund gives you international exposure. If not reserve 10-15% for broad international index. Once your in stick with it for the long haul. Trying to pull money in and out and putting into things that you think are the right move is were most people get into trouble.