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

[21stIcon]

Originally Posted by h1techSlave

Final recommendation: Sell your positions today or tomorrow and buy all cash/bond/fixed income stuff. Watch for S&P 500 to come back to around 830 before you move money in to S&P 500 again.

Disclaimer: The above is just my personal opinion. You can loose money if you follow my advise. If you gain a substantial amount of money, please donate some of that money to IV . IV does not pay me a commission. I do have positions in S&P 500 and am planning to sell it today or tomorrow.

How much you made so far in the market?
Please post your trading record before crapping out this forum....

[longwait4gc]

Originally Posted by albertpinto

my thoughts exactly ..h1b's post does not make any sense ..sell now buy later..sell at 850 buy bonds(hope he knows that there are loads and costs involved when you buy and sell) ..if you have lost a lot then just hang in there especially if you don't need the money ...1-2 years from now, the market will definitely recover(it won't reach the heights but it will be better than it is now) ..to pull out now means a sure loss

AlbertPinto, You are right. H1 tech might be new to market (no offense h1). Apart from huge costs Most of the 401K wont allow you to do day trading(or frequent trading) on mutual funds and bonds. If they think you are day trading on mutual funds they might ban you (Source Fidelity financial advisor I met last year). If you want to trade frequently (or day trading) then they recommend you open stock account and do whatever you want.
He is also trying to time the S&P index. This could be a very bad idea. If you are long term investor look for value picks which are beaten down due to the recession. The companies survive recession will come out strong. They will come out stronger than any index.

[Canadian_Dream]

http://www.mymoneyblog.com/archives/...than-cash.html
Here the evidence: For the 20-year period from 1988-2007, the S&P 500 had annualized returns of 11.81%, while investment-grade bonds returned 7.56%. But what did the average mutual fund investor return? Only 4.48 percent. That’s worse than super-safe Treasury bills, which managed 4.53% annually!

Also a good read:

http://assetbuilder.com/blogs/scott_...me-to-buy.aspx

[snathan]

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http://immigrationvoice.org/forum/sh...3597&page=1000 (Contribtuion Campaign - 2009)

[forgerator]

Originally Posted by Canadian_Dream

http://www.mymoneyblog.com/archives/...than-cash.html
Here the evidence: For the 20-year period from 1988-2007, the S&P 500 had annualized returns of 11.81%, while investment-grade bonds returned 7.56%. But what did the average mutual fund investor return? Only 4.48 percent. That’s worse than super-safe Treasury bills, which managed 4.53% annually!

Also a good read:

http://assetbuilder.com/blogs/scott_...me-to-buy.aspx

You should also add that 1999-2009 (10 yr period) the S&P has declined more than 35%.

http://stockcharts.com/charts/historical/spx1960.html

[needhelp!]

Folks thanks for all the inputs. I haven't made any changes yet as I am still reading the books recommended and would like to learn more.


Before I posted this thread, I had made a change to reduce my contributions thinking that I will get more take home pay instead and try to make more payment towards house, but I noticed that after taxes, it is only a fraction, so I think that was a bad decision and I will start contributing more to 401k again.


I noticed an option to "Automatic account rebalance" on the 401k website. Is it a good idea to opt in for this?

[Canadian_Dream]

Originally Posted by needhelp!

I noticed an option to "Automatic account rebalance" on the 401k website. Is it a good idea to opt in for this?

It is like an auto pilot/cruise control that will rebalance from current allocation to target allocation, not a very reliable tool. I would rather do it at the end of year manually, that way I have more control on the transactions. Also, the new target allocation funds like Life Cycle Funds and Hybrid 401K's change the underlying funds to constantly keep your allocation age balanced so there is not need to rebalance at all.

http://www.investopedia.com/articles.../05/051005.asp
http://www.businessweek.com/magazine...n_id=rss_daily

[Canadian_Dream]

Originally Posted by needhelp!

Folks thanks for all the inputs. I haven't made any changes yet as I am still reading the books recommended and would like to learn more.

That's certainly going to help you in long run. It will change your mind set on how you look at investment and retirement. That's something no one can teach you.

Originally Posted by needhelp!

Before I posted this thread, I had made a change to reduce my contributions thinking that I will get more take home pay instead and try to make more payment towards house, but I noticed that after taxes, it is only a fraction, so I think that was a bad decision and I will start contributing more to 401k again.

You did the right thing. Always max out on your 401K, Traditional IRA and College Savings Funds (if you have kid(s)) that would be putting aside 23,500 (or even more if you employer matches) in a tax free growth. You earning potential will peak and then it might go down a bit so it is good to contribute early. If you take this money out and put it in you regular bank account it will give you a false sense of security but you are indirectly stealing from your retirement and kids education. You might not have enough time in future to make up for it. Start early and stay put.