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Old 05-19-2011, 09:34 AM
Blackberry Queen Blackberry Queen is offline
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Default If you HAVE to stay in your 401k (I do): where to invest?



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For now, it is nonnegotiable for me to get my money out of my 401k. Still working on hubby. If it gets bad enough (possibly too late) he would empty them but he's not there yet.

I know how to invest to prepare for retirement. And typically if I was worried about another crash I would move everything to fixed or bonds.

Now that I'm awake to prepping and starting to pay attention, I'm still not knowledgeable about investing it in light of the possibility about inflation/QE.

Is there some specific advice y'all would have if I must stay in? I am not adding any more - it's just there from when I worked.

Any of our future savings will be partly in cash, partly in a very liquid account, partly in preps, and go towards paying off our mortgage. Then into assets to help us move off-grid. That is my new model for diversification

Thanks for any input that will help inform my decision making.
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Old 05-19-2011, 09:56 AM
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There are few safe places to put money in a 401k.

What type of crash do you mean?

A US market crash will kill your stocks
A usd crash will kill your bonds.
A crash in the euro/yen will kill your foreign investment

Most 401ks do not give the option for any type of commodities

I have mine set up like this
25% large company U.S stock
25% us bonds
25% large foreign companies
25% foreign bonds

I dont have all that much money in my account(less than 10k) but if i did i would look into converting into a ira so i could buy into commodities. I plan on cashing mine out here in 6 months when i look for a new job.
Old 05-19-2011, 10:16 AM
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It depends on how much time you have left to retire. If you are nearing retirement, there is less time to recover from any additional losses that might occur, so you should focus on capital preservation. But if you still have a good 10-15 years at least, I would recommend that you take more risks. There is more time for those early gains to compound.

Take a look at emerging markets, BRIC funds (Brazil, Russia, India, China)
Small Cap Stock
Large Cap Stock

Those all seem to be making a good rebound these days.
Old 05-19-2011, 10:29 AM
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Speaking strictly short-term, the market is due for a correction. QE2 ends in June. Stocks are overvalued and need more fun-money to keep the false rally going. A turning off of the QE spigot, no matter how temporary, will hurt stocks and paper commodities alike. So when stocks are bad people will flock to safety...making bonds good, right?

Well, long-term, bonds are in trouble. They'll weaken as the USD inevitably declines and interest rates rise. By definition the USD, and by extension bonds, is/are the next bubble.

The biggest thing to realize is that nobody here, including myself, knows if and when any of this will happen. Remember, this is YOUR decision to make. But if you're bearish, and I believe you are, go 100% money market. Given what we can expect in the short-term this can't hurt you if you're locked into the 401(k).
Old 05-19-2011, 10:49 AM
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Diversify Diversify Diversify!

If you have to choose, go with utilities. Folks will pay to keep the electricity and water running, even when they hide the car from repo man or stop paying the mortgage. Utilities are "blue chip" stocks, (companies guaranteed not go out of business). Utilities may lose a little residential business when folks move away, but as long as folks have a roof over their heads, they will pay for electricity & water. They are not high growth stocks, but very safe money.

There is actually a lot of talk about worldwide energy consumption going up by 40% in the next decades.

1. The real estate bubble just popped causing a credit crunch.
2. The next one is food shortages that can cause riots in undeveloped regions.
3. The final one will be an energy shortage that could start wars.
Old 05-19-2011, 10:57 AM
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Quote:
Originally Posted by RebelINS View Post
.. go 100% money market. Given what we can expect in the short-term this can't hurt you if you're locked into the 401(k).
You realize that banks recently changed the rules and can stop or limit money market withdrawls without notice, right?
Old 05-19-2011, 10:58 AM
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But you realize this is a survivalist forum, contact a professional investment advisor.
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Old 05-19-2011, 11:10 AM
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Quote:
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But you realize this is a survivalist forum, contact a professional investment advisor.
Best advice so far.
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Old 05-19-2011, 11:14 AM
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You realize that banks recently changed the rules and can stop or limit money market withdrawls without notice, right?
In such a scenario do you imagine that stocks will be any more liquid or prudent as an investment?

Also, about contacting an investment professional, here is what you'll hear:

When stocks are UP - Hold! Buy! You're making lot's of money!
When stocks are DOWN - Hold! Buy! The market is on sale right now. Dollar-cost average, baby!

Listen, there are good advisors out there, but the ones available to the middle class are little more than mutual fund salesmen.
Old 05-19-2011, 01:37 PM
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Its a 401K, you should diversify between sectors.

Make sure you have 3-5 different sectors at any one time.

Something like, Precious Metal Fund , Oil Fund, Pharmaceutical Fund, Military Contractors Fund, Falling Dollar fund.
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Old 05-19-2011, 03:42 PM
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You might check PRPFX - Permanent Portfolio Fund. It is diversified, including physical gold.

http://permanentportfoliofunds.com/

Just a thought. It is where I'd have some money if I had any.
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Old 05-19-2011, 04:42 PM
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As a victim and sometimes survivor of five of what I would call major market downturns I have learned the following: If the market is going up like crazy and is too good to be true, get the heck out of stock funds!. I move my mutual funds around like a stock broker. If I don't feel safe I move into low yield type funds for awhile. In my opinion recent upturns in the general stock market reflect only the devaluation of the dollar and I can't really call them "gains" per se but merely treading water on inflation. That being said, so called "safe funds" are losing to inflation. I suggest keeping on top of the general trends in the market and be prepared to move your money frequently or as frequently as your plan allows. Many plans are starting to limit how often you can make changes in your investments (guess who wins in that case?).
Old 05-22-2011, 11:12 PM
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TPTB are now turning their attention to 401Ks.

401K SEAL - proposal to restrict loans from the 401K
GRA - Guaranteed Retirement Accounts - Proposal to convert holdings in 401Ks to T-bills and Government Annuities.
Old 05-23-2011, 05:46 AM
NotARoleModel NotARoleModel is offline
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Quote:
Originally Posted by Sundsvall View Post
TPTB are now turning their attention to 401Ks.

401K SEAL - proposal to restrict loans from the 401K
GRA - Guaranteed Retirement Accounts - Proposal to convert holdings in 401Ks to T-bills and Government Annuities.
I hope you're not referring to the 2008 Congressional "hearings" on 401ks for this information.

This hysteria has been long debunked as nonsense.

The only proposal regarding an annuity OPTION was for the 401k PROVIDER to offer an annuity OPTION INSIDE the 401k plan. The participant could CHOOSE to place some or all of their holdings into the annuity. Nothing about the annuity OPTION would be "Government". No "mandatory" or "converting" about it.

Frankly a guaranteed annuity OPTION would be worth a look for some participants.

I have some of my IRA holdings inside guaranteed annuities and have so for some time.
Old 05-23-2011, 09:12 AM
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Annuities.......blah, thee worst investment i have ever seen. Good luck with them though.
Old 05-23-2011, 09:43 AM
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The "nice" thing about an annuity is that you can't pull it out all at once as cash, and you can't move the whole thing somewhere else.
Old 05-23-2011, 11:15 AM
RebelINS RebelINS is offline
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It looks like some people are tapping their inner Suze Orman here...i.e. annuities are the worst!

In a vacuum any one investment can be good or bad for a solitary individual. You need to consider a person's age, goals, risk tolerance before labeling an investment as "good" or "bad". You should run from anyone who speak in absolutes.

The fundamental flaw in discussing the good and bad of any investment right now is the fact that the underlying means of calculating value, the dollar, is in free fall. Buy low/ Sell high, dollar-cost averaging, portfolio diversification...none of these strategies matter if the medium these assets covert to, dollars, become worthless. This needs to be considered for ALL investors REGARDLESS of their age, goals and risk tolerance.

I am slowly converting my holdings to hard assets in whatever form is valuable to me. Everything else is just paper. In the meantime, while I keep my 401(k), I'll keep it in cash. The market is primed for a correction and sooner or later the BIG correction will be was it all away. I hope to be out before that happens...
Old 05-23-2011, 01:12 PM
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Quote:
Originally Posted by NotARoleModel View Post
I hope you're not referring to the 2008 Congressional "hearings" on 401ks for this information.

This hysteria has been long debunked as nonsense.

The only proposal regarding an annuity OPTION was for the 401k PROVIDER to offer an annuity OPTION INSIDE the 401k plan. The participant could CHOOSE to place some or all of their holdings into the annuity. Nothing about the annuity OPTION would be "Government". No "mandatory" or "converting" about it.

Frankly a guaranteed annuity OPTION would be worth a look for some participants.

I have some of my IRA holdings inside guaranteed annuities and have so for some time.
Actually, its back on the table for consideration.

I would stay away from all US government debt and annuities.
Old 05-23-2011, 05:59 PM
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The "nice" thing about an annuity is that you can't pull it out all at once as cash, and you can't move the whole thing somewhere else.
Sorry but I can draw cash any time I'd like ... with NO TAX IMPLICATIONS EITHER and no penalties. ..... and I can moveto a different provider tomorrow morning.

You need to bone up on TODAY'S annuities ... not your dad's or grandpa's.
Old 05-23-2011, 06:04 PM
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Actually, its back on the table for consideration.

I would stay away from all US government debt and annuities.
If you think it will get through a Republican held house good luck.

I'd love to be running against any senator or rep that voted for ANY limitation on a 401k.

Again, the suggestions out of that committee were for the PLAN PROVIDER not the "government" to OFFER AS AN OPTION a "guaranteed" fixed annuity.
The plan participant, that's me or you, would have the OPTION not the MANDATE to CHOOSE the annuity as one of their investment options.

What in god's name is bad about additional investment OPTIONS ... especially one that would offer a GUARANTEED rate of return OR a GUARANTEED income payment?
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