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Have Investments changed so drastically with the economy that 401k can't make a return?
I put 15% of my pay into my 401k. This year it sees a loss of 5.8% for the year. The previous year was like that too and my employer has stopped matching a few years back.. So it would be better to just put it in a savings account earning 1%. I remember back when I was investing in mutual funds that the firm would move stocks every minute in order to capitalize and had bottom of like 12% that if it went under they moved the stocks. You never saw negative returns. Ya, I know that was a long time ago and the margins are a lot lower now but you never saw negative returns. What has happened? I know the economy is in the toilet and the market is volatile but if your shifting quickly, and diversifying there should be next to no chance of negative return unless its being run by idiots. Any suggestions? I would like to retire one day.
3 Answers
- Go with the flowLv 710 years agoFavorite Answer
Look at your investment options in the 401K
Just about all companies have a Stable Value Fund
Ours returned 4.7% last year.
Not much, but it's better than losing money.
You'll get taxed on your earnings (interest) in a taxable savings account
- Anonymous10 years ago
In this environment of market manipulation(over 10 years of 0% returns on the S+P 500) you would move to a higher percentage in Bonds,...."Balanced Funds",..The most conservative Equity Funds,..and Bond Funds,..and not Index Funds like everyone is so quick to promote..(In a 401K where you can't readily time the market, or unlikely to switch positions)
But once again the crooks find a way to steal peoples hard earned money,..just Blame it on Greece and Italy,..it's Bloody Crazy..
- ag318punLv 710 years ago
First off, if your employer no longer has a match, stop investing in it
and instead invest with a mutual fund and use the Roth IRA.
Times are tough now days and its hard to come out ahead investing.
Find a mutual fund like Fidelity Balanced fund (FBALX). It has a split
of 60% stock and 40% bonds with investments in foreign countries.
It has a low fee and no load. One of my favorite funds.
