re: my 401k....so let me get this straight

if I'm reading these numbers correctly, at this point I would have been better off just buying food or booze or something (or paying off my credit card debt and student loans) with all the money that I've "put aside for my retirement" this year. I mean, those numbers that are all red and shit aren't really helping me out a whole lot here, right?

I actually considered just pulling it all out about a year ago, to pay off debt, as a matter of fact, but apparently it's not that simple and you take a massive tax hit and it's generally frowned upon and so forth. And I know, it stands to recover eventually if the whole economy doesn't collapse completely and irrevocably in the meantime, but speaking from the point of view of someone who's generally pretty far removed from the stock market...well, this still completely sucks, even if the credit markets can be jump-started somehow (and I don't also stop getting paid) and it's only a terrible recession and not the beginning of another great depression. Way to go, capitalism! What a crock of shit.

What we have is cancerous capitalism.

It's what Republicans live for.

I'm with you on blaming the Republicans as a matter of course, because all the Reaganomics bullshit has engendered most of this current panic, but I think it's time to seriously re-assess the economic infrastructure of our nation. If not now, then in five years time once all the stop-gap measures have been attempted.

the facts of nature. Capitalism, on the other hand, is an economic system
chosen by people (well, by some people who do the actual choosing) over
possible alternatives. While we cannot rationally blame cellular division
for anything, we can certainly blame capitalism (thus blaming the people
who chose it) for what we rationally may conclude are its consequences.

The loss from some arbitrary time in the past is not all that relevant unless you are retiring today, and opened your 401K with a lump sum on that date.

Did you PUT IN - and I mean you, personally, not including matching - more or less than your current balance? If less then you have gained even in this bear market thanks to matching and dollar cost averaging.

If more (unlikely but depending on when you started and what if any match you get it's possible) then yes right now you are in the red, but then again you're also buying at this price point with your deductions and setting the ground for future gains.

And of course you should include tax benefits in that calculation to be really complete. If you put in say $100 a month you would have only taken home maybe $70 or so of that depending on your tax bracket if you had not signed up for the 401K, and of course you would have had no matching.

Between tax benefits and matching I for one can see a Dow at about 6000 before I am REALLY "in the red". YMMV of course, but I can pretty much guarantee the real cost/benefit is better than it looks on the bottom line of your last quarterly statement.

and yeah, yeah, "laying the ground for future gains" and so on, provided society doesn't collapse and all...it just looks prima facie like anything I've contributed this year might just as well have been set on fire.

If you had opened your 401K at the start of the year and got no matching. In that case yep, bad move in hindisght and sorry to hear it. Hope you have enough time left to see it grow back. But unless in that unlikely scenario, you are in fact still doing better than this year looks.

It's like a guy who bought a house 10 years ago at $180K worrying because resale value has dropped from $400K to $320K last year. He's still ahead, and he nevr HAD that 400K, but he still feels bad if he doesn't dig into it deep enough and just looks ta a short term horizon.

fully vested, just sitting there. It is a very good indicator since I am not muddying the water by adding to it (no longer employed by this company).

No matter what has happened, I have not seen it dip into the funds I PUT IN + the company matching. It has chipped at the interest earned by the base funds. Paper loss? sure. My own money lost? No and there is still more than there would have been if the money had been in traditional savings or CD

I took my dough out of the mutual funds and stocks a year ago, and moved it to the money market holding account within the 401(k) account. No penalty.

Depending on the time you have to retirment and your stomach for (real or perceived) losses however temporary this may be a good move. Since I have 20+years to retirement and have no reason to suspect the market will never again reach the level it's at right now I'm staying 85% equities. But if you - the OP - are very risk averse and close to retirement this is worth considering - although you would then "lock in" losses on your equity funds. I'd at least wait until after the bailout is digested properly, until we have more info on what happens when the Fed actually BUYS the toxic assets, and until the election, but that's one guy's advice and a layman's at that.

in some plans. I have done the same but I wish I did sooner. I will be trying to get back in when it starts going up.

and put it all into a mutual fund holding inflation indexed treasury
bonds (TIPS). It is up 14% over the year. You can buy those directly
and I advise you do ASAP, before everybody realizes how high the inflation
will be over the next few years and TIPS prices fully reflect that.

I'm rolling mine into Gold.

This is my problem with all the people who left their 401Ks in the stock market. Why didn't you sell the stock when the market was high, like 13K, or 13.5K, or 14K? I do not understand why people stayed in, watching the DOW drop steadily from 14K, to 13k, to 12K, to 11k, and now below 10K. It is not my intent to bash you, but to ask why you didn't get out. I keep reading about people who lost a bundle, and I wonder why they didn't get out.

The market has dropped 40% of its value in the past 12 months. When it dropped from 14k to 13k, I encouraged everyone who would listen to get out of equities entirely, or move into precious metals. Most chose to ride the markets down, now they're wondering what happened to their retirement fund. If you bought the DOW at 9000, you've lost 80% of your increase in your port folio in the past year.

The problem is that most don't realize the wide range of possibilities for their 401K, and simply go along with the stock market investment. The truth is, if you had converted all your investments to Canadian dollars eight years ago, you'd be far better off than if you put the money into the DOW. When Canadian dollars are a better return than the stock market, you know the past eight years have been one huge LOSER, financially, in the USA.

and 2, because there is a prohibitive, labrynthine process for people to do much besides move the portfolios around a little bit.

But mostly reason 1. That and all the advice you get is "well, just ride it out, it will recover and you don't want to just give in to panic" and so on.

If I was retired, I would almost certainly have done as you suggest.

It's not as if it was a whole lot of money anyway...I was already counting on working until death, I'm just bitter because I'm simultaneously in hock to goddamn Bank of America, putting yet more money into the pockets of the people who did make out like bandits over the past couple of decades.

... make sure you're not invested in anything that might fail, in which case you'd lose all your investment in that.

If you are at least four years from retirement, you will likely see the DOW recover and surpass its 14K high in the next four years.

This really hurts people who are retired, nearing retirement, or who had too much of their cash or savings warehoused in the stock markets. Anyone who is years from retiring would do best to put it out of their minds and use this time to learn how the markets rise and fall over time, then do it again. It's like learning when it's time to pack up and leave the coastal areas because this hurricane really is coming ashore. You have to know when to get out.

But if you're not looking at retiring soon, and don't need the money to live on, let it ride.

I think the bottom of this market is likely 8500-9000 on DOW, but it could go lower. Lower than 8000? Probably not.

It gives you a good return and it is not nearly as risky. I wouldn't cash in my 401K, but just stop making contributions to it. However, on the plus side though, when the market bottoms out, it will be a very good time to buy. I had 100 shares of Freddie Mac when the government knocked the pins out from under it. Bang, I lost $600 in one day. However, I bought another 400 shares at 30 cents a share and got most of it back in about a week. Now I am wishing I had bought 1,000 shares and that I had not sold 200 of them at 60 cents a share.

And to think people told me it was foolish to put my IRA money in bank CDs.

for debtors but bad for creditors. The government, the
biggest debtor of all, now have no choice but to inflate
its way out of debt. That is what all these liquidity
injections and bailouts are all about. I expect the inflation
to reach 15-20% annually over the next few years. If you owe
anything at a reasonable interest rate (below 10%), it is good
for you to wait and pay it back later in devalued dollars and
spend your today dollars on stuff you really need, rather than
buy it later at inflated prices. I would even recommend to
borrow now (if you can get credit) and buy useful stuff. If you
are already in debt, don't rush to pay it off. The inflationary
relief is coming. It shouldn't be just for the government.

and he told me basically since it will be years until retirement, to keep my money as is, that over the long haul it will rebound. I am skeptical, however, it's hard to watch all the money that was put in this year suddenly disappear. Yeah, way to go, this sucks big time!

If it's years until your retirement, you should be buying every time it dips this much. The worse case scenario if you're talking about the long haul is no increase. You won't lose money if you're looking at cashing out 15 years from now.

Defined contributions = 401K or something of that sort.

The old-style pension plans were something employers did not want to pay anymore for their employees. The only way they wouldn't pay is if the company went bankrupt, but even then federal law says the pension obligation would be transferred over to the federal government, but the government back then made sure the company declared bankruptcy because they were in real financial trouble and not simply to dump pension obligations on taxpayers and reap bigger profit margins as a result.

haul...that is what individual investors are always told.

:(

A few other posters have already stated you can move funds within your retirement plan, here is one tool that may help, there are several others as well.


About the McClellan Oscillator and Summation Index

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=327&topic_id=716&mesg_id=716

several years away from retirement, I would let it ride. It's basically to late to do any shifting or pulling out at this point; its going to make those losses permanent, and then some with taxes added in. Just my advise.

would have been good. If your young you may recoup. I always thought my mom was an old foggy when she told me to invest in US Savings bonds. But I guess she was right.