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Green Eggs and Spam
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I work for government contractor with a stock symbol.

My co-worker noticed today that the company 401K was still down 15+% despite the market bounce back up.

This seems to indicate that the fund panicked and sold their positions.

That is a LOT of money lost from hard working peoples.

Anyone else know if their company investment retirement accounts were manipulated to lose the maximum amount during the brief swing?
 

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I work for government contractor with a stock symbol.

My co-worker noticed today that the company 401K was still down 15+% despite the market bounce back up.

This seems to indicate that the fund panicked and sold their positions.

That is a LOT of money lost from hard working peoples.

Anyone else know if their company investment retirement accounts were manipulated to lose the maximum amount during the brief swing?
I will say this: 401k plans benefit somebody, just NOT YOU, the "investor". They mainly benefit big money managers who live la vida loca on the "fees" they get to manage the money which was forcibly confiscated from your pay. These managers all have expensive educations from universities where your child can't attend because attendance is limited to "legacy" admits, meaning the rich children of rich alumni. Their desire is to make a quick buck, to pump up their returns, by buying low and selling high.

Robert Kiyosaki called them "the electronic herd", and like any herd, they tend to stampede a lot. One gets a money making idea, they all buy high, then they sell low. The more job they can be seen to do, the bigger their fees. They're really no smarter than the rest of us, despite their expensive educations. Did I mention that they're always stoned? And partying every weekend with your cash?

So, you have a bunch of dopeheads who live on Wall Street who want to be seen as doing SOMETHING, ANYTHING, to earn their fees. So they sold "your" stock at its lowest point, probably to their speculator friends, who will then sell it back to them at its highest point. The masses are stupid, and it applies on Wall Street too.
 

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401Ks are heavily regulated. So if a fund drops 5%, they have to sell as mandated by law.

The same mandate, doesn't say that they have to buy back in for the rally.
 

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401Ks are heavily regulated. So if a fund drops 5%, they have to sell as mandated by law.

The same mandate, doesn't say that they have to buy back in for the rally.
I'm not following this statement. If a fund drops 5% they must sell? What do they sell?

Are you saying the 401k account must sell a fund that drops 5%? If so, what about the case where a 401k account is set up in mutual funds?

The money in my 401k goes into the funds that I designate and are not shifted without me initiating a transfer. The funds provide a prospectus for anyone to look at the investing strategy and I've never seen anything about a 5% trigger.
 

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Sun, are you just making things up now? A 5 percent loss trigger? What are you talking about?!

The more likely devil lay in the details of whichever funds you are invested in within your 401K, what those funds are invested in, what redemptions they had to meet during this selloff against what their cash balance was, et cetera. This does not seem like an odd circumstance to me at all.
 

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I work for government contractor with a stock symbol.

My co-worker noticed today that the company 401K was still down 15+% despite the market bounce back up.

This seems to indicate that the fund panicked and sold their positions.

That is a LOT of money lost from hard working peoples.

Anyone else know if their company investment retirement accounts were manipulated to lose the maximum amount during the brief swing?
you invested in the company stock? or you divest in others in the offering? only way that is lost is if you cash out and take that loss along with penalties. BTW the only money also lost is the money invested not the interest or earnings. that is all a crap shoot. you pay to play and it is a gamble. but its best to divest so you dont have it in a single failure like a company stock. investing in the company is fine. but make sure its money your willing to burn. invest in mututals and other safer less risky investments for long term.
 

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Sun, are you just making things up now? A 5 percent loss trigger? What are you talking about?!

The more likely devil lay in the details of whichever funds you are invested in within your 401K, what those funds are invested in, what redemptions they had to meet during this selloff against what their cash balance was, et cetera. This does not seem like an odd circumstance to me at all.
I wouldn't dream of it. FK I think you should make some phone calls and find about certain retirement funds.

They are designed to be extremely conservative.

They can't hold more than 5% on any given security.
They have to sell if the fund falls by a small amount. This varies according to the fund.

BTW, notice how all the money flowed to Bonds and Gold during the meltdown. That's the CAPM paradigm in action.

The market risk money was converted into the market risk-free assets.

I would have bought Gold, but alot of money managers chose to buy the good ole US T-Bonds, downgrade and all.
 

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I wouldn't dream of it. FK I think you should make some phone calls and find about certain retirement funds.

They are designed to be extremely conservative.

They can't hold more than 5% on any given security.
They have to sell if the fund falls by a small amount. This varies according to the fund.

BTW, notice how all the money flowed to Bonds and Gold during the meltdown. That's the CAPM paradigm in action.

The market risk money was converted into the market risk-free assets.

I would have bought Gold, but alot of money managers chose to buy the good ole US T-Bonds, downgrade and all.
I could make many calls, or you could just back up your statement with some facts.

The closest thing the industry has is what's called an asset allocation fund, better know as "Target Retirement Date" funds. Those will buy and sell to maintain a certain allocation of stocks, bonds, and cash so the performance of each of those asset classes will affect the fund's buying and sell (rebalancing). But that is not done on a daily basis or even a monthly basis and it certainly is not some sell side trigger that when stocks drop 5% they sell a certain percentage and go to cash.

It's simple, show me what you are talking about.

Oh, and I still do not understand how I could post one graph after another showing how CAPM has failed historically to do what it was supposed to do, yet you cling to it as some kind of tool. Hey, to each his/her own I guess.
 

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They mainly benefit big money managers who live la vida loca on the "fees" they get to manage the money which was forcibly confiscated from your pay.
I've never heard of a "forced" 401k. Every 401k I've ever had was an opt-in scenario where I could choose the amount of money I wanted to contribute, and then from there I could choose from a list of investments (mutual funds) to invest it in. You make it sound like a 401k is a tax.
 

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I've never heard of a "forced" 401k. Every 401k I've ever had was an opt-in scenario where I could choose the amount of money I wanted to contribute, and then from there I could choose from a list of investments (mutual funds) to invest it in. You make it sound like a 401k is a tax.
Every 401k that I have seen has a type of "stable value fund" that is usually in bonds and pays now about 3 or 4%.

You do not have to invest in equities.
You get your match in cash with no market fluctuations to worry about. Why not take the free money? No risk, no brainer.

Some companies do use the opt out proceedure instead of opt in. That has proven to be a benefit to people who don't have a clue.
 

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I work for government contractor with a stock symbol.

My co-worker noticed today that the company 401K was still down 15+% despite the market bounce back up.

This seems to indicate that the fund panicked and sold their positions.

That is a LOT of money lost from hard working peoples.

Anyone else know if their company investment retirement accounts were manipulated to lose the maximum amount during the brief swing?
First off no offense to your "co-worker" but perhaps he is mistaken and/or misinterpreting some info?

Did he/she mean your company stock itself is down 15% or a specific fund is down or what?

I doubt there is a running daily investment barometer for the composite 401k plan to compare.

Be careful of break time chatter and lunch room advisors. Become informed on your own. If confused, call the plan itself and get the facts.
 

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I wouldn't dream of it. FK I think you should make some phone calls and find about certain retirement funds.

They are designed to be extremely conservative.
You may not be intentionally making things up, but you have some misconceptions. Not all retirement funds are conservative. I have a choice of several in my company's plan, from conservative to agressive.

They can't hold more than 5% on any given security.
What you're confusing here is that any mutual fund cannot own more than 5% of any single security, meaning that if a company has a value of $1M the fund can't invest more than $50K in that company. This is to prevent the fund from controlling companies. A fund can invest all of it's assets in a single company if it doesn't violate the previous rule. This applies to all mutual funds, not just retirement accounts. Hedge funds are not subject to this rule but that's a topic for another thread.
They have to sell if the fund falls by a small amount. This varies according to the fund.
What are they required to sell? This makes no sense. Why would a fund want to sell low?
 

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You may not be intentionally making things up, but you have some misconceptions. Not all retirement funds are conservative. I have a choice of several in my company's plan, from conservative to agressive.

What you're confusing here is that any mutual fund cannot own more than 5% of any single security, meaning that if a company has a value of $1M the fund can't invest more than $50K in that company. This is to prevent the fund from controlling companies. A fund can invest all of it's assets in a single company if it doesn't violate the previous rule. This applies to all mutual funds, not just retirement accounts. Hedge funds are not subject to this rule but that's a topic for another thread.
What are they required to sell? This makes no sense. Why would a fund want to sell low?
What you both may be confusing is the Invest. Company Act of 1940 which governs the amount of the fund that can be invested in any one security. But that does not mean that the fund cannot own 100% of the shares of company, so long as that percentage invested in that company does not make up a percentage of the fund that violates the ICA of 1940.

Here:
Under the Investment Company Act of 1940 that governs mutual funds, a fund cannot have more than 25 percent of its holdings in any one security. The other 75 percent must be divided among at least 15 different securities so that none of them represents more than 5 percent of the total fund. Furthermore, none of those 15 securities can own more than 10 percent of the stock of any one company.
 

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What you both may be confusing is the Invest. Company Act of 1940 which governs the amount of the fund that can be invested in any one security. But that does not mean that the fund cannot own 100% of the shares of company, so long as that percentage invested in that company does not make up a percentage of the fund that violates the ICA of 1940.

Here:
Under the Investment Company Act of 1940 that governs mutual funds, a fund cannot have more than 25 percent of its holdings in any one security. The other 75 percent must be divided among at least 15 different securities so that none of them represents more than 5 percent of the total fund. Furthermore, none of those 15 securities can own more than 10 percent of the stock of any one company.
Ok. 10% not 5%. My mistake.
 

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You may not be intentionally making things up, but you have some misconceptions. Not all retirement funds are conservative. I have a choice of several in my company's plan, from conservative to agressive.

What you're confusing here is that any mutual fund cannot own more than 5% of any single security, meaning that if a company has a value of $1M the fund can't invest more than $50K in that company. This is to prevent the fund from controlling companies. A fund can invest all of it's assets in a single company if it doesn't violate the previous rule. This applies to all mutual funds, not just retirement accounts. Hedge funds are not subject to this rule but that's a topic for another thread.
What are they required to sell? This makes no sense. Why would a fund want to sell low?
Sundsvall may be thinking of those "Target Retirement" portfolios that assign a year to their title such as "Target Retirement 2035" and so on.

They would be considered "conservative" as theoretically you place you funds in the one that is closest to your "retirement" age and it does the work for you along the way shifting assets to "safer" investment classes as time goes on.
 

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Ok. 10% not 5%. My mistake.
I still do not think you are thinking of this correct. A fund can own 100% of a company's shares. But a single company cannot make up 100% of a fund's net allocable.

You are talking about how much a fund can own of a company's stock but the real measure is how much money does the fund have to invest, and you start there. A fund could own 100% of many companies, and then go to buy a 1% share of a huge company, and that 1% would take up so much of the fund's investable money that it would not be able to buy it per the ICA of 1940.
 

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Every 401k that I have seen has a type of "stable value fund" that is usually in bonds and pays now about 3 or 4%.

You do not have to invest in equities.
You get your match in cash with no market fluctuations to worry about. Why not take the free money? No risk, no brainer.

Some companies do use the opt out proceedure instead of opt in. That has proven to be a benefit to people who don't have a clue.
Every qualified plan MUST have one by law.

Except these days they pay about 2% at best.
 

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I still do not think you are thinking of this correct. A fund can own 100% of a company's shares. But a single company cannot make up 100% of a fund's net allocable.

You are talking about how much a fund can own of a company's stock but the real measure is how much money does the fund have to invest, and you start there. A fund could own 100% of many companies, and then go to buy a 1% share of a huge company, and that 1% would take up so much of the fund's investable money that it would not be able to buy it per the ICA of 1940.
I understood exactly what you were saying. If there's not a limit on the amount of shares a mutual fund can own of a single company then I was mistaken.
 

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Green Eggs and Spam
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Discussion Starter · #20 ·
...Did he/she mean your company stock itself is down 15% or a specific fund is down or what?

I doubt there is a running daily investment barometer for the composite 401k plan to compare...
There is ALWAYS one person that somehow managed to glean SOME weird insight to the retirement scheme; and this co-worker is that person.

The "safe" funds don't move much, so I assume the conversations I have had have been about the mutual funds offered in the company 401K with different presumed risks along those funds and retirement dates.

Employees at my workplace must have at least a small position in each fund to get a real time status of the report of the fund.

My post was based on other co-workers mentioning that their chosen funds were still down, and the guru had already told me they were.

I do not know the details, and I wish I did. Obviously my question has merit as this thread has added extra questions and details.

This thread has been very helpful to me. It seems that if I hold a fund in my 401k that changes its holdings based on market levels that I may find a way to change my own 401K holdings to take advantage of the down swings in the market.

The worse thing I can do is to continue to get all the losses added together, without adding the gains.
 
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