$$$$$$$ Financial Security $$$$$$$

[Godiva]

Has anyone here noticed that their retirement portfolio has taken a big hit..I lost 10,000 in a year. My accountant is begging me to keep my moola where it is. Most financial experts are also advising investors to keep their money where it is and take the blows. That it will rebound.....but when??? What do you guys think ? Where can I invest my money now so I won't take a huge hit. While some of my friends are putting all their money back in to the company..ala Enron. I diversified so mine is not all in one "pot" Is the Roth IRA a good deal...Are 401k still the thing to do??

 

The way I see it..I was beginning to think that we were comming out of this recession but with war looming over our heads.. I think our economy will take another blow and investors will lose..

[tedbear]

I would be thrilled if it were only $10,000 that I was down. My loss is well into 6 figures. And, don't think I'm rich--I'm not. And unless things rebound, I'm certainly not going to be rich in retirement either!

 

I get the same advice from everyone (except people who have no background in investments, who are just scared) to "just hang in there." The best advice I've heard is to investigate the funds you're invested in and if you sense a true loser that won't bounce back (a la Enron), you should consider dumping it and moving to something you have faith in.

 

I've been advised that historically, the market has usually recovered within 20 years, except for the depression. Based on that I'm hanging in there, but it didn't make me feel any better when I opened my third quarter statement a few weeks ago. Ouch!

[Huey]

401K are taking a big hit at the moment.

 

Anyway, the fact that you watched X percent of your portfolio lose value over an entire year is not a good sign in itself. You should not have even been invested in the market during the past year. Since you are already there and have lost X percentage of your portfolio you probably should leave everything be.

 

The object is to buy low and sell high. Not buy low and sell low. You've already lost, it will be quite some time before we see a rebound. Probably not till the 4th quarter of 2003 or the first quarter of 2004.

 

Good luck.

[Samai139]

There are a couple of things you did not mention which should determine what you do with your investments:

1. How old are you, and how many years under retirement? Why is this important? Historically, economic cycles show that the stock market is the BEST place for long-term investment. The past 10 years have not been exactly "average" so you have to expect some corrections.

2. How much are you paying in management fees in your present portfolio? There are funds which charge less, and you might want to consider moving some or all to those type of funds.

3. Is your present portfolio "balanced?" "diversified?" You can ask your financial advisor to sit down with you and explain how much of your fund is in growth, how much income, how much bonds, etc., etc. Once you have an idea of where the money, you will have a better idea IF you want to make any changes.

4. Beware of ANY and ALL schemes that promise quick, fast money. It is NOT going to happen. BIt the bullet and be patient.

Lastly-----good luck, YOu are not alone.

[+ imagooddog]

Funny that this topic appears now, for I am in the process of transfering all of my IRA into a fixed fund with a bank

here that will pay 4.28% (not much I know, but it is better than a loss each month which has been the history of

my fund for the past year and a half. Just wish now that I had done it earlier. Again, this is not for everyone, for

so much of it depends on your age and how far from retirement you are. I took early retirement several years ago

and depend on the IRA account for funds to live on. At the rate it has been historically loosing each month, I would

be running out of funds during this next year. So at least my transfering into a guaranteed fixed rate fund which

I can also withdraw from, I am extending my living funds for several more years. My IRA fund advisor should have

suggested something like this at least a year ago, but he just kept saying "hang in there, it will come back soon"

which of course it has not. And I have dismal feelings about a rebound in the near future. Again, it depends on your

individual situation.

[Guest NakedTony]

As previously mentioned, the "correct" answer really lies with how soon you plan to retire. I've got at least 15 years or more until I retire and here's my philosophy.

 

1. Don't invest in single stocks. I prefer to use mutal funds.

2. Don't invest in mutual funds that aren't old enough to be going through puberty.

3. Invest in mutual funds with a 10 year track record of at least 10%.

4. Place 25% in "growth and income" funds. Place 25% in international funds. Place 25% in mid-cap funds. Place 25% in low risk or fixed rate funds (these will NOT have a 10% rate of return).

 

As my grandmother used to say, the best time to buy meat is when it's on sale. Right now mutual funds are on sale and I'm buying all I can.

[Guest Kenny021]

Everything that everyone has said is basically correct. Your age and your actual "need" of the money to live on in retirement is very important in deciding what you will do. As for me, I have my funds in a Fidelity Growth and Income Mutual Fund. Like everyone, it has taken a hit over the past year or so. However, it is diversified with investments in stocks, bonds, etc...a mix of everything. It is keeping pace with all the other "well reviewed" funds. In other words, it is doing precisely what other similar funds are doing. I have not changed anything and am still continuing to invest regularly into it...something called DOLLAR COST AVERAGING. I feel that the market will VERY SLOWLY start to come back over the next year or two. It probably wont reach what it was in the late 90s but I think it will come back. Historically, that has been the case. How long it will take is anyone's guess but expect that it will eventually get there. If you're in a fund that Morningstar recommends and you can wait a few years to use the money, let it be. If you need the money to live on within the next year or so, you should consider putting it into "safe" investments.

[jackhammer91406]

I agree with suntan. I pulled my funds out a year ago last summer before the first hits started so I got all my value without losing anything. I now have it in a high yield IRA, and while it doesn't make the rates it made in the halcyon days of 14-20% , it's nice to have all of it instead of having lost half of it.

jack

[KY_TOP]

I'm still putting a lot into my 401k, with 50% employer match, but I moved more of my 401k into Government bonds. I have a lot of leeway to move my money within my 401k and this has helped... my loses were between 1-2k this year before I moved more to bonds. I'll let them sit there awhile until the market settles.

[Guest Not2Kinky4me]

I too have lost 6 figures since 2000 because I stayed invested and never ever thought we would have experienced the horrific events and slow economic growth that we did. I refuse to give up. Im just changing my investing and trading methods as I learn and doing much better.

 

Many of you have already given some good advice, specifically, keep it diversified, safe (some aggressive) and stay invested. Selling out scared at or near the bottom is not the answer to the past years losses.

 

I am going to add 2 things for some of you to consider. If you have the time and the knowledge - day trade a small portion of your money. Buy and sell the same day. You can easily make a few % on average each day.

 

If you are not yet informed of individual companies, then begin trading the spiders. QQQ, SPY, DIA etc. These symbols represent baskets or indices of companies. For instance, DIA = The Dow Jones. Had you bought DIA near its low 2 months ago, and sold last week, you would have made about 19%.

 

Stay away from bond funds at this point. Its too late. Interest rates wont be going lower unless our Nation experiences another outrageous travesty like we did on 9-11.

 

When bond interest rates go up, and they will in 2003, your principal will GO DOWN. Talk with a financial consultant before investing in bond funds.

 

Big Money will soon come out of bond funds and when this occurs and it will go to work in equities.

[Guest Bitchboy]

All this is so depressing. I fear by the time I retire dick sucking won't even interest me any longer ... (or shorter, either!).