401(K) allocations when is it time to move the money around

[Canadian_Dream]

This is a classic example of market timing. I respectfully disagree with this approach it is full of peril and one could incur huge losses in this strategy, let me tell you why.

1. Recession is always called after we into it or past it. Beginning of a cyclic downturn is hard to predict because of usual fluctuation of stock market. So the idea that he can sell at 14,000 is a dream scenario and very very few could achieve it. If you can you can make a career in investment.

2. Gains are generally realized using year end re-allocations to bring stock-bond to the right proportion. In that way his gains are locked into bonds during bull cycle.

3. Selling during a downturn is a bad idea, because you could lock your losses by selling and you will not know when to get in. You get trapped into bear trap loosing even more money. On the other hand if you do not sell, your number of "shares" will remain unchanged regardless of the price and you never have to worry about when to get in.

4. The best thing to do during down turn is allocate more to stocks because you are buying low and reduce exposure to bonds because these are expensive. You will recover much faster.

5. No matter how bullish the market is never deviate from bond-stock age allocation because you don't want to get caught in bear market during around target retirement time. So say start with 75-25 (Stock-bond) and end with 20-80 (Stock-Bond) even if there was a greatest bull market around your retirement don't touch the 80, play with the 20 and go aggressive and keep the 80 in annuities or stay in bonds. This is the lesson some retirees have learned during this downturn. There was a prolong bull market since late 80' and now a bear run since 2000.

Originally Posted by breddy2000

Yes it is... I knew when I was typing that. This is to put it in simple terms as the Unkown factor is the severity of the recession.

Usually recessions tend vary between 6 months to 2 Yrs. Dotcom lasted for 6 months. The current recession started in Dec 2007 and still no one has any clue as to how much longer it would last. So when the unkown factor is to be taken into account, its better to play it safe.
It will atleast make sure you have nailed in your profits.

Lets say a senario when DOW was 14000, in this case, "Need Help" would have been at 20-25% profit. If he would have put all the money into Money Market and wait for the things to get settled down, he has ample time to get back to where he sold off at 14000. There was a big talk about Recession, Housing Crisis and Credit Crisis when DOW was at 14500. It would have been good to wait until the economic indicators show some confidence before entering the market again.


Don't you think so.....?

[needhelp!]

Thanks for all the links

Originally Posted by Canadian_Dream

Needhelp:
The best way to get financial help would be to read the following books cover to cover. Trust me you need to read them to get the right mind set and confidence to protect and grow your hard earned money. Read it in a month's time and you will know more than what most investment advisers would ever tell you. Never trust anyone to manage your money. Do it yourself !!!

1. Four Pillars of Investing
http://www.amazon.com/Four-Pillars-I.../dp/0071385290
2. Random Walk Down the Street
http://www.amazon.com/Random-Walk-Do.../dp/0393315290

Also, open a free account at Morning Star and run a morning star X-ray on your portfolio and see actual allocation vs. target allocation. Also, check this out, a very balanced portfolio for someone in early 30's.
http://www.mymoneyblog.com/my-retire...ment-portfolio
Another excellent allocation, but your 401k may not offer all the selections:
http://www.mymoneyblog.com/archives/...llocation.html

One last word: Stay in passively managed low cost index funds. The best way to get more information on indexing is:
http://www.bogleheads.org/


Good Luck.

[desi3933]

Originally Posted by breddy2000

Technical Indicators can be used in any scenario. For day trading , swing trading or long term trading. If you have full control on the 401(k) when you can paly around with it on a daily basis, you can do so. But in my case, I do not have the previledge of making changes to 401(K) atleast for 6 months. In this case its better to see the long term economic indicators and make changes accordingly.

Candle stick technique is "NOT" just the only method to evaluate the price movement.

>> Candle stick technique is "NOT" just the only method to evaluate the price movement.
Absolutely. Just that I use candlestick charting with indicators (such as ADX). I use Ninja Trader as it allows me to custom program my indicators in C# (.net). There are, of course, tons of charting applications.

Long Term charting is where chart bars are weekly bars. It provides overall market picture.

Good Luck.

____________________
Not a legal advice.
US Citizen of Indian Origin

[Canadian_Dream]

Easiest button would be life cycle funds if your 401K provider offers one. Not the greatest one but the best lazy portfolio !!!

Originally Posted by needhelp!

Thanks for all the links

[needhelp!]

I don't see Ticker symbol for some of my funds.. is this possible?

[Canadian_Dream]

Unlikely, unless it is a stable asset fund for cash reserve.

Originally Posted by needhelp!

I don't see Ticker symbol for some of my funds.. is this possible?

[longwait4gc]

Originally Posted by needhelp!

How do I detect these attributes ?

When I selected my funds, all I went with was the table that showed the percentage gains over a period of time.


Also how to detect funds for this:

my 2 cents:
1. Look at expense ratio. It is the % amount of money they charge you to mantain the fund. Ideally actively managed funds with expense ratio less than 1 better. But it may be difficult to find actively managed funds with less than 1% expense ratio in your 401k offerings. So pick one with less expense ratio.
2. Each fund has a strategy or goal. Like investing in foreign funds or small cap etc... See if their goal aligns with your goals.
3. Past gains are not indication of future. Distribute your portfolio across multiple funds.

[yabadaba]

Originally Posted by needhelp!

Thanks for all the links

needhelp:

you have been doing well. The market was down average of 34-38%...depending on which index you prefer to track....if you lost 21%; you are doing better than the market. it also means you are in a safer portfolio mix compared to the market. while now its good, because u did not lose as much as the market, when recovery happens (yes it will happen naysayers) you will not do as well as the market. For us, people who are 30 years away from retirement, the general rule of thumb is to be anywhere from 80-100% in equity. You can spread your allocation whichever way you like, but typically the market returns about 8% over the long term.

The other thing to keep in mind is the investment costs. typically mutual funds can have very high costs that would be relected in the expense ratios and fees. long term wealth buildding advice is to buy the whole market (namely an index fund) from low cost companies like Trowe Price, Vanguard and Fidelity. so if your funds in your 401k are from any of those three companies, you will most likely be in a good place.

In short, dont do anything other than changing your future allocations more towards 100% in equity index funds....and dont think about rebalancing your portfolio as it currently exists. leave what is in there... but change future allocations. cos now.. u r buying low and hopefully one day you will sell high.

[needhelp!]

Originally Posted by Canadian_Dream

Unlikely, unless it is a stable asset fund for cash reserve.

They all have SSGA prefix but they have different names. like Stable value, S&P 500 Index .. so it won't be possible to analyze?

[longwait4gc]

Originally Posted by needhelp!

I don't see Ticker symbol for some of my funds.. is this possible?

Did you try typing the fund name in finance.yahoo.com quote box?
Is this one of the funds you are looking for?
http://finance.yahoo.com/q?s=SVSPX

[h1techSlave]

I have been following Scott Adams (the same Dilbert guy) advise for some time and haven't lost out much.

The advise is:
1. Only invest in index funds. S&P 500 is my choice. Russel 2000 is too diversified. Dow is too limited - only 30 companies.

The only modification that I have done to his advise is to move all my money from the fund to all cash option after a couple of days rally. Following this strategy, I have lost 15.6% in 2008. Considering the overall market that is not bad.

[desi3933]

Originally Posted by h1techSlave

I have been following Scott Adams (the same Dilbert guy) advise for some time and haven't lost out much.

The advise is:
1. Only invest in index funds. S&P 500 is my choice. Russel 2000 is too diversified. Dow is too limited - only 30 companies.

The only modification that I have done to his advise is to move all my money from the fund to all cash option after a couple of days rally. Following this strategy, I have lost 15.6% in 2008. Considering the overall market that is not bad.

I also trade in index funds - S&P 500 and Nasdaq 100. When market heads down, I move to money market or metal based funds.

In 2008, it was up 4.2%. Not too bad as compare to market.

** Not a trading advise. For information only **

____________________
Not a legal advice.
US Citizen of Indian Origin

[needhelp!]

Yes. Thanks I'll try that!

Originally Posted by longwait4gc

Did you try typing the fund name in finance.yahoo.com quote box?
Is this one of the funds you are looking for?
http://finance.yahoo.com/q?s=SVSPX

Only the S&P 500 is there, other ones don't show up:

SSgA Stable Value Fund
SSgA Large Cap Core Equity Fund
SSgA S&P® MidCap 400 Index Strategy Fund

[lord_labaku]

IMO the whole concept of 401k was a scam created with the collusion of govt. airheads and wall st. thugs. If they can scare you into thinking you need millions when you retire; then they can get all your retirement money to play with & to buy private jets.

[hankles]

Many financial experts suggest using Dollar Cost Averaging as an effective strategy to overcome market fluctuations. This strategy is particularly effective because it takes away the need for speculation and trying to time the market.

This strategy is essentially nothing but investing a fixed amount of dollars at regular intervals in portfolio of your choice. Over a long period of time, since your fixed dollars have been invested at various highs and lows of market, you have taken out the risk of investing huge sums at highs and on the flip side have lost the opportunity of investing huge sums at lows. At the end, your odds of coming out at the top are much higher than the average speculative trader that resides, to some degree, in almost all of us .