I am pretty disgusted with the stock market now. I see that every time it takes a huge plunge, they seem to base it on “worries” or “fears.” The $12,000 401k I put into an IRA last year is now at about $9500. If/when things recover enough to get the balance up to where it was, where would be a good place to move it to? Gold, or real estate, or ??
Basically I am having trouble trusting my 401k to a market run by paranoid emotions.
Where to move 401k away from stock market?
16
Mar
Don't Know
March 16, 2010 at 7:36 pm
This is a tough one, because it is hard to invest in something as volatile as the stock market, but we have been told that is where your money will keep up with inflation, etc. I would recommend not reacting right now and selling. Remember, you want to sell when prices are high and buy when they are low. Keep your money in the market and don’t panic. It will go back up eventually.
I don’t think you can buy real estate or gold in your 401K, it just depends on what options your employer offers.
Make sure you diversify between stocks and bonds, value and income, small companies and big companies, etc. Usually an index fund is your best option.
Outside your 401K, real estate is sometimes good, as is gold. It’s all about diversification.
src50
March 16, 2010 at 8:08 pm
You need to look at the investment options offered within your 401(k) plan. You are limited to those.
superchick773
March 16, 2010 at 8:40 pm
DON’T TOUCH YOUR 401K!!!! LEAVE IT BE!! DON’T MAKE THINGS WORSE!
PEOPLE RELAX! THINGS WILL GET BETTER AGAIN.
Net Advisor
March 16, 2010 at 9:18 pm
Cashing out your 401(k) would be a huge mistake.
1. You would be subject to income tax on the entire amount withdrawn.
2. You would be subject to a 10% IRS penalty on the entire amount withdrawn (in addition to income taxes) if you are under 59 1/2.
3. I would look to Dollar Cost Average each month or bi-monthly (better) in major market indexes such as the S&P 500 and hold for 15+ years.
http://en.wikipedia.org/wiki/Dollar_cost_averaging
Retirement Mistakes
http://www.investopedia.com/articles/retirement/06/rollovermistakes.asp
Philip R
March 16, 2010 at 9:36 pm
Check out an annuity. MetLife has a variable ( connected to the market) but also guarantees 6%. The way they do this is invest your money in fund you select and then hypothetically keep track of you account balance as if it would be a fixed income security, like a bond, growing at 6% a year. So basically if you invest 10k and the market does -5% yours will do 6% hypothetically. At the end of the contract whichever account balance is higher you get. So over the contract the stock market does 4% you’ll get 6%(compounded annually of course), if the market does 10% you get 10%. Another pro is its tax deferred. The only downside in my opinion is there is a minimum 10 year contract, but if your seriously holding it for retirement there are plenty of other features you’d like. If you want more info check it out at MetLife.com. Its called the Preference Plus Select (PPS) Annuity. Also the 6% guarantee is know as the Guaranteed Minimum Income Benefit Plus (GMIB+) if you speak to a rep. Good Luck