How bad did your 401K or retirement portfolio drop? (investments, stocks, year)
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
denverian, your situation is more common than unusual. As a result, there is now a movement from fund houses towards marketing "target date" funds, which will take care of that for you based on only two inputs from you......expected retirement date and risk tolerance. Perhaps your employer will add that as an option.
gls, you have lots (and lots) of company with those numbers. But, you can't be an equity investor and measure success day by day (unless you are actually a day trader). CREF is doing no worse than the majority of equity funds out there (and I'm sure they delivered a good ride to you for the last 4 years.)
To corroborate your point, I left about $7K in CREF since 1980 and it has grown to $195K.
PS If I were a Day Trader I would be posting on the Religion forum under "exorcism".
Is it me or am I becoming poorer every day. I should have put my money in my safe deposit box because it will be there tomorrow. I leave it in deferred compensation plan and it's disappearing daily.
Is it me or am I becoming poorer every day. I should have put my money in my safe deposit box because it will be there tomorrow. I leave it in deferred compensation plan and it's disappearing daily.
I take some satisfaction that my broker quit two years ago to become a realtor. If he were a banker, he would have stolen your safety deposit box.
Here's what I find ridiculous about 401Ks. I recently readjusted mine, and it didn't lose anything in 2007, but my degree isn't in financial invesment, so it's somewhat of a crap shoot for me. They send me info. (booklettes) on all their funds every now and then, and it might as well be in Chinese. The average person, even with college education, can't make sense of all this. I also admit I have little interest in the stock market, bonds, etc. Hell, I don't even know the difference in a stock and a bond! I just know enough to keep it diversified. At least back in the days of pensions, someone who knew what they were doing controlled all the investment.
Denverian--
Stock=equity that you own in a company;
Bond=an "IOU" issued to you by an institution (government/company) with the promise of the return of principal with interest.
Easy, see? If you cannot understand the brochures that your company sends you, then you need to educate yourself. 401(k)s are superior to pension plans in many ways, but you need to take responsibility. An excellent book that I love is "Personal Finance for Dummies" by Eric Tyson. Tyson has a lot of "For Dummies" books that are fantastic resources, and Tyson does not sugar-coat investing and finances.
I don't know your investment choices in your 401(k), but maybe you can choose a low-cost no-load target retirement fund that takes care of all the rebalancing for you? My 401(k) has a lot of cruddy funds, so I just invest all of my 401(k) money in a Fidelity Freedom Fund. It delivers steady performance, but it's not a flashy super-high-yield fund and is pretty low cost and has no loads (fees), so I'm happy with it. I also have a Roth IRA with Fidelity where I have more choices--but I just stick to index funds.
And not all pensions are controlled by people who know what they're doing. Several have gone belly-up because of stupid decisions that they've made (some even invested heavily in the sub-prime mortgage market).
Pick up some of those "For Dummies" books by Eric Tyson. I pretty much knew nothing about personal finance until about 5 years ago, and I learned a LOT from his books. BTW, stay away from those books by guys like Kiyosaki and David Bach. They like to promote stuff like "Buy lots of property!" (even if your credit stinks) and "Buy gold!" (even though it's a lousy investment long-term).
Last edited by TexanWest; 03-13-2008 at 02:19 PM..
When fund companies or financial planners start talking about "average returns", what they do is very misleading IMO and potentially very dangerous for your money. You don't really make an "average" return of 8 or 10% per year.
If you truely made 8 or 10% a year in stocks, no one would ever leave the market or have negative feelings towards stocks. You're making 8-10% a year, what's to feel bad about? But it doesnt work that way.
In the last 33 years, stocks have gone up 8-12% a year, 3 times!
Look at the returns, they're all over the map. From a high of 34% a year to a low of -23%.
8-10% a year return is sales talk designed to make the market more comfortable than it is. Of course you can do well long term, but the market is all over the place in any given year.
I'd also stay away from guys like Kiyosaki, Bach. Stay away from people that make most of their money selling books and giving speeches (and talk about making money).
I got out of stocks October 2007. I haven't lost but many of my friends have. I'm market savvy and follow it. My friends aren't and just put their money where the monthly 401K newsletter tells them. Sadly I think alot of American do that. Once they dumped the pensions and handed retirement over to individuals there should have been some type of education that the corporations were mandated to give.
Not everyone knows how to wheel and deal in the stock market.
When fund companies or financial planners start talking about "average returns", what they do is very misleading IMO and potentially very dangerous for your money. You don't really make an "average" return of 8 or 10% per year.
If you truely made 8 or 10% a year in stocks, no one would ever leave the market or have negative feelings towards stocks. You're making 8-10% a year, what's to feel bad about? But it doesnt work that way.
In the last 33 years, stocks have gone up 8-12% a year, 3 times!
Look at the returns, they're all over the map. From a high of 34% a year to a low of -23%.
8-10% a year return is sales talk designed to make the market more comfortable than it is. Of course you can do well long term, but the market is all over the place in any given year.
I'd also stay away from guys like Kiyosaki, Bach. Stay away from people that make most of their money selling books and giving speeches (and talk about making money).
Overall in 2007 we were up around 9% (not too bad, but not great compared to 2006's 15%). So far this year we've had some winners and losers, such that, on the whole, we're up around 4%. In other words, compared to inflation, we're currently under water....
We're invested in a ton of places - the spouse likes some of the energy service, agriculture and gold ETFs and those have done very well. The standard stocks and mutual funds are struggling a bit.
As far as being able to understand stock prospectuses (prospectii?) - always remember that they are written by the company they represent, and are hence marketing blurbs. Sure, there are some requirements in what they have to put in a prospectus, but there is no requirement on slant and spin. For a mutual fund, for instance, the only useful thing in a prospectus in what the fees are. That's important, but it's also important to know WHO manages the fund, what their track record is and what their philosophies are. You generally won't get that, in useful form, in a prospectus. The only way to have a clue is to do outside research, rather than rely on the prospectus.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
