401k

[BonnieJW]

Are there any financial gurus out there? I need help. My 401k goes down daily. I see no point in contributing to it when it just keeps declining, but if I stop I'll suffer tax consequences. Is there a 401k selection where the money will just stay put, very little interest but no decline? I am not financially savvy and really don't know one mutual fund from another. I called the Principal Group (401k admins) and they said they cannot give out financial advice. So what good are they??? Please PM me if you can help and I thank you in advance for your trouble.

[colt equalizer]

1. Check with your plan administrator; you certainly have a money market fund option

As far as a declining market; I have been investing for years and a declining market means you get more shares for less money. Actually you only want the market way up when you retire and start cashing in your 401k, the rest of the time you really want buying opportunities.

That said, your plan has to offer by law fixed and money market options. I suggest you review your information that you would be getting and have gotten when you joined, if you misplaced it, check with your plan's administrator, or just call or go to the web site of the plan's investment company.

[Lance_Boyle]

3. damn skippy - this is the time to acquire cheap shares

I bumped up my monthly contributions to the point of near-painful. I'll maybe bump them back down again when the getting is not quite so good.

To the OP - the time to move investments to "safety funds" was a year or more ago. Best thing to do with 'em now is wait for the value to be regained.

[rox63]

2. My plan has a bond fund and a "stable value" option, which in invested in T-bills

Most 401K plans have similar options. When my 401k started tanking, I moved it all over to those options, to wait out the economic disaster we are seeing. It may not make me much, but at least I'm not losing money.

[DailyGrind51]

4. Colt is correct!

You should be able to shift funds. Right around the time the dotcom bubble burst, I began shifting my TIAA/CREF from mutuals to the money market. Even variable annuities permit shifting within an available array of funds. When I learned that the CEO of Putnam was engaged in unethical practices a few years ago, I had all the funds in my Allstate Variable Annuity pulled out of Putnam and spread out among the other three funds.

You can probably use their website using the code on your monthly or quarterly statement to gain access. They will probably give you a PIN to access your specific accounts. They will also probaly have a "contact" link so that you can write them your detailed questions.

Good luck, and don't panic, eventually it will reverse course. It just might take awhile.

[taught_me_patience]

5. How old are you?

How far are you from retirement? If you are far, then just keep contributing. You should have a blend of stocks and bonds. Put at least 25% of the portfolio in bonds. Stocks should be blended in small, large, and foreign to diversify risk. Never have more than 75% allocation in bonds. People don't realize that bond funds can fall as well. Diversification and discipline are ket to making money.

[slackmaster]

6. Unless you are very near retirement, your logic is bass-ackwards

Assuming you have at least several years until retirement, a down market is the time when you should be contributing MOST to your 401k.

The lower the prices of stocks, the more shares you buy with the fixed dollar amount you are having taken out of your pre-tax earnings.

Is there a 401k selection where the money will just stay put, very little interest but no decline?

Most plans offer a money market fund option. That is basically a cash savings account that will pay a small amount of interest.

I am 50 years old and have about 10 years to go until my house is paid off. I consider 60 a semi-retirement target age. I am having 18% of my pay taken out and put into a mix of mostly stock funds in my 401k. Employer match is about 6%. That adds up to about what I pay on my mortgage.

When the stock indexes all go down just before pay days, I smile. In 10 years they will all very likely have come back up at least once.

As you get closer to retirement, it's generally considered wise to reallocate your assets into more stable instruments like bonds and bond funds.

[BonnieJW]

8. I am 59.

I don't feel like I have "years" to recoup. I plan to work beyond retirement age; maybe to 70.

Thanks to everyone for the advice. It's very unnerving to watch the balance go down each week.

[Xenotime]

9. I am truly sorry for you.

You situation if horrible to see all that money you have worked for gone for blood oil and a greedy administration

[M0rpheus]

7. As an employee of a 401K administrator.

You have to keep in mind that we are not licensed to dispense financial advice, and we must tell you that. Our job is to help you make a decision by giving you information about what is available.
Don't be upset with them, they're just making sure that they remain employed and don't get their company sued, for practicing without a license.

If there is a website that you can go to to check your 401K, you'll probably find the prospectus' for all of the funds available.
Every 401K plan that I service, has at least one option that is "safe", I would assume that most other plans have something similar. They usually have names like "Stable Value", "Balanced" or "Bond".

If you don't feel confident making a decision on moving your money, you should contact a financial adviser, they are licensed to give you advice, whether its good advice or not would be up to you to determine.

[Wcross]

10. Money market fund.

DO NOT PUT IT IN A BOND FUND!!!!!!!!! As soon as they start raising interest rates it will drop like a rock.

I just don't look at my balance anymore, I consider my contributions as another retirement tax like social security. I have a pretty decent mix of funds and 20 years before I will need them. If I was very close to retirement I would have it in a money market.

[melm00se]

11. this, beleive it or not,

is a time to acquire cheap shares...be very circumspect about jumping out of investments, doing so locks in your losses.

You don't indicate your age but unless you are looking at pulling the $$$ for retirement in the next 3-5 years, ride it out.

the S&P 500 went from it's low 880 during the last dip (post 9/11) and has run back up to 1335, all in 6 years.

The NASDAQ index has nearly doubled over the same time period

The DJI rose from 7600 to 11453 over the same time period.

don't panic, ride it out, over time the odd are heavily in your favor.