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My 401K has gone down about 40% since the downturn in the economy.(was about 165K). I have a small mix of Fidelity funds to choose from. What should I be looking to invest in given market conditions. Should I stay in stock or bond funds. And then which ones. I know this is long-term investing, but I want to protect and grow my investments, and try to prevent further losses. Thanks.......
If it were me, and if I were still fairly young, I'd be in stock funds. If you get conservative NOW, you'll just be locking in your losses to some degree. Stocks are much cheaper now than they were before the drop. The idea is to buy low, sell high.
My personal research has led me to find that Fidelity Funds are crap.
I'm not sure why you would want to be in those.
Same thing goes for the Vanguard Target Retirement 20XX Funds. I'd stay away...
I would recommend to stay in the stocks and perhaps add a bond to your portfolio.
Since you are young and have a lot of time until you retire, stick with small or mid cap mutual funds.
My 401K has gone down about 40% since the downturn in the economy.(was about 165K). I have a small mix of Fidelity funds to choose from. What should I be looking to invest in given market conditions. Should I stay in stock or bond funds. And then which ones. I know this is long-term investing, but I want to protect and grow my investments, and try to prevent further losses. Thanks.......
Your 401(k) is not a standalone investment but rather a portion of your overall investment portfolio and should be evaluated as such. The investment choices in the 401(k) should compliment your Traditional or Roth IRA(s), taxable saving and other items that might be considered investments. Review your other investments and use the 401(k) to fill in gaps.
My personal research has led me to find that Fidelity Funds are crap.
My personal research has led me to say such statements are totally ridiculous. Fidelity has an extremely large selection of funds and many are among the leaders in their respective sectors. THAT'S why you would want to be in those. In fact, more generally (with rare exception at most), it's just plain silly to say Company X's funds are good or bad...esp one as large as Fidelity. It really depends which fund you're talking about.
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I would recommend to stay in the stocks and perhaps add a bond to your portfolio.
Absolutely - for longer-term investors, go very heavy on stocks, very light on bonds.
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Since you are young and have a lot of time until you retire, stick with small or mid cap mutual funds.
? Having a lot of time doesn't mean go w/small or mid-cap. Diversity is extremely important in long-term portfolios. I would strongly suggest a mix of large, mid, and small-cap, along with some international and perhaps a small % of sector or "specialty" funds. (Again I mean overall - as stated above, depends on what your other investments (if any) are in.
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Check their ratings on Morningstar . com
That is a good place to start, but not the be-all/end-all for how "good" a stock projects.
My personal research has led me to say such statements are totally ridiculous. Fidelity has an extremely large selection of funds and many are among the leaders in their respective sectors. THAT'S why you would want to be in those. In fact, more generally (with rare exception at most), it's just plain silly to say Company X's funds are good or bad...esp one as large as Fidelity. It really depends which fund you're talking about.
I don’t care for Fidelity Funds. I think there are better options out there. A lot of people think they don’t have choices so they just go with a name they are familiar with. Fidelity provides benefit services to many companies, including mine, and all of the non-Fidelity funds performed better than the Fidelity. Not to mention, I would rather stick with a no-load fund with a small management fee. I favor the Vanguard funds more, overall, but I don’t care for the Target Retirement 20XX funds.
I’d rather go with a Fairholm, Heartland Value, Marsico or T. Rowe Price fund.
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Originally Posted by bill545
? Having a lot of time doesn't mean go w/small or mid-cap. Diversity is extremely important in long-term portfolios. I would strongly suggest a mix of large, mid, and small-cap, along with some international and perhaps a small % of sector or "specialty" funds. (Again I mean overall - as stated above, depends on what your other investments (if any) are in.
Having more time to allow your money to grow means you can afford more risk. Small-cap and mid-cap funds & companies have the potential to grow the most, as well as the potential to fail. Because of the high degree of risk, investors want to be compensated. We hope that higher risk = higher return. A young investor doesn’t need to be in blue-chip stocks or investing in a bunch of companies that have nowhere to grow. The real money to be made is in small companies that haven’t exploded yet. When you are young, you can afford to be more risky. When you are old, you want CDs, dividend stocks and bonds holding down your portfolio. Not to say that getting a CD at a young age is bad, depending on your level or risk aversion, it might be the perfect investment.
As for the whole portfolio, sure you can add in a MO, PG, XOM or a Bond to offset the more risky small-cap, mid-cap and international investments. An ETF is also a great way to gain exposure to a lot of different companies. Diversity is important.
Remember when we had the tomato scare. You couldn’t find tomatoes anywhere. Tomato farmers were losing money. A smart farmer would grow something else besides tomatoes. Anything could happen. Some report might come out saying that tomatoes are bad for you, thus decreasing the demand for tomatoes. Grow tomatoes, grow pumpkins, grow lima beans—If you want to stay in business, you better grow something besides tomatoes.
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Originally Posted by bill545
That is a good place to start, but not the be-all/end-all for how "good" a stock projects.
I should have been more specific.
Ratings refer to past performance. It is up to the investor to determine whether they think that past performance will help predict future performance.
I have increased my foreign exposure to 30% from 15% in my 401k. I have 20 years to go before I need it. Put more in Index funds as well. Im at 70% stock 10% bonds 20% cash.
The real question is whether there will be further losses or whether the market has found a bottom. If you think the market could decline another 20% then move the money into fixed interest for the time being. If you think the market has found its bottom then move it into a mix of small cap and large cap funds.
The real question is whether there will be further losses or whether the market has found a bottom. If you think the market could decline another 20% then move the money into fixed interest for the time being. If you think the market has found its bottom then move it into a mix of small cap and large cap funds.
This is assuming you feel you can accurately do market timing. Don’t let regrets over last year’s losses dictate your investment strategy. With the current economy conditions, many people are becoming investing myopic. You can’t tell whether the tide is rising or falling based on the performance of a single wave hitting the shore. With a 401(k) you are making bi-weekly contributes to a hopefully diversified portfolio. There is no better time than now to make these contributions because the funds are cheap. You are buying more shares with a dollar today than you did two years ago. This is the whole point of dollar cost averaging.
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