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Thread: LORDY I DONT KNOW WHAT TO DO WITH MY 401(k)!!!

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    Veteran Member missmays1983's Avatar
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    Dizzy LORDY I DONT KNOW WHAT TO DO WITH MY 401(k)!!!

    k so i have a job with a mid-size bank that i have been employed with for 7.5 years now...my company provides a pretty decent 401(k) plan in which the company matches 100% of employees contribution up to 6% of your annual income...i've been putting the max 6% in that they will match every month...so that's anywhere from 200-300 dollars every two weeks (i'm paid bi-weekly and at an hourly pay rate, and the said sum includes the company's match to my 6%)...

    i have absolutely no knowledge about stocks and investing, and for the longest time had most of my money in company stock(which was working out beautifully for around a year) but mid way through 2008 i cut that shit out (i'm not going risk keeping my money in my company when i have seen what has happened to the price per share of Wachovia and BOA)...

    but now i am sooooo frustrated about where to put my money...i had a partial amount in the BIC bonds and treasury bonds, the stuff that WAS supposed to be a safe, less volitale (sp? fuck it.) option...but with the governement being all screwy and throwing money out left and right and racking up it's own massive debt, i'm scared to put my money in those as well...

    HELP!!!! gosh i've tried to educate myself about my stock plan and options that come with my 401 (k) but it just goes right over my head...i cant figure it out...i don't know where to put my money...im clueless...

    im just scared shitless im gonna lose the close to 7 thousand that i have, and now im wondering should i just take some time off completely and not contribute anything for a while...hell for all i know my bank that i work for could be THISCLOSE to going under too...all i know is im losing money left and right and i should have much, much more in my 401 (K) than is in there, especially with the amount of money i've been putting in...

    *sigh*.........tips anyone?
    thanks for listening to my half whine/half rant....
    KA-KOWWW!

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    Veteran Member person's Avatar
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    Default Re: LORDY I DONT KNOW WHAT TO DO WITH MY 401(k)!!!

    You're thinking about all the right risks, I reckon. You've also got inflation to worry about, and whether the USD is safe. Government bonds or cash (in a "safe" bank) is the least risky thing I can think of, but you still have inflation, currency and a certain amount of default risk to worry about (esp with the US govt buying bad banks). You might try spreading it around a few uncorrelated currencies/countries as diversification but with $7k, it might not be possible.

    If you're worried about the US government starting to default, you might surmise that if that occurs the The Shit Has Really Hit The Fan and so your priorities change completely. Maybe hold on to some physical gold?

    (Disclaimer: I am not an economist )
    Once again, the conservative, sandwich-heavy portfolio pays off for the hungry investor
    - Dr John Zoidberg

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    Featured Member minnow's Avatar
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    Default Re: LORDY I DONT KNOW WHAT TO DO WITH MY 401(k)!!!

    Firstly, who manges your 401K? The bank, or a mutual fund co. like Fidelity, etal?? I have 401K where I work, but there's probably as many variations of 401K plans as there are workplaces.

    Does bank or mutual fund co. have an advisor? If so, I'd set up a session with him/her. Advisor will go over your goals, risk tolerance, etc, and suggest a portfolio mix of the available funds. I'd say 4-8 funds would be reasonable mix, not too concentrated, yet not juggling too many chainsaws.

    If, however, you're pretty much restricted to Co. stock plus maybe a few fixed rate securities, I'd say you're hosed, unless you're working for the next Microsoft. (Which banks AREN'T) // Whatever, its' definitely a good idea to reduce your exposure to company stock (can you say "Enron"???)

    It sucks watching your 401k balance go down, but given that its supposed to be for long term goal, (not money for new car or house downpayment)1 must be mentally steeled for that, just like not getting too giddy with big gains. Neither scenario goes on forever. Good luck.

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    Banned Melonie's Avatar
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    Default Re: LORDY I DONT KNOW WHAT TO DO WITH MY 401(k)!!!

    if you're really serious about preserving your 401k assets, there are a few 'unconventional' options ...

    - cash in the 401k plan ... pay the penalty ... and then invest the money however you wish.

    - borrow against the 401k plan ... avoiding the penalty ... and invest the loan money however you wish

    - virtually all 401k plans, no matter how stripped down, will offer an option of a money market investment of some sort. This obviously won't protect your assets from a US dollar devaluation, but it will allow your assets to escape a stock market or bond market crash.

    - some 401k plans offer stock mutual funds with high 'international' stock components. While these funds generally prosper in times of US dollar devaluation, these days every major country's industries are shaky.

    With all of that said, any 401k plan that still has an employer matching contribution is still a source of 'free money'.

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    Veteran Member missmays1983's Avatar
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    Default Re: LORDY I DONT KNOW WHAT TO DO WITH MY 401(k)!!!

    just wanted to thank all of you for your helpful insight! thanks for taking the time to help and you all brought about some ideas that i havent even thought of so i am feeling a lot better about it already! thanks again!!
    KA-KOWWW!

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