Comments on: My 401k has lost a lot of money – how about yours?

By: jay

jay — Sat, 30 Jul 2011 09:50:23 +0000

401k investing in mutual funds is a lose lose situation. If your stock portfolio loses 40% you need the market to go up 80% just to make back that what you lost. How long will that take? I dont know! How much will you make back? I dont know! What I do know is that its hard to make back what you lost!

As an investor your job is to make money and preserve gains. Not lose money! With 401k’s you can move your money freely but not when you may need to.

I say look at the history of the market and all the crashes. There must be a patter or a set % gain the market reaches or plateaus at after a recovery. That I think is an exit point and you just wait for the next crash and take steady gains until then.

You can make hundreds of percent gains after the crash………….works in stocks! should work in mutual funds!

By: bill

bill — Mon, 14 Feb 2011 03:52:28 +0000

i think 401s would be unnesessary if the government would cease the printing of money,,inflation would be a strange and unfamiliar word and the average working american could save up their money in a good ol savings account that gains 5 percent intersest..the stock market is to darn risky,,,unstable and unprdictable,,,gold,silver,platinum,real estate,things of that nature are almost gauranteed to last in true value,,invest in these stocks and get the gains your loooking for,,,,feed the children,,,breakthrough ministries,,christian childrens fund,,

By: Josh

Josh — Wed, 05 Jan 2011 22:48:38 +0000

I think it’s funny that people see losses and gains as a positive thing, without diving into it.

If you have 100,000 dollars and it loses 35 percent, then gains 35 percent, most people will say they broke even.

But it’s not true.

100,000 – 35% (35,000) = 65,000
65,000 + 35% (22,750) = 87,750

So you have to have a much bigger return on the upside to make up for the downside. And it goes both ways.

This is why markets can have such a negative impact and people don’t even realize it. Plus, I don’t understand why you would want to put taxes off for the future but my guess is the are going to go up. I would rather pay them now personally.

By: Jim Tuttle

Jim Tuttle — Wed, 07 Apr 2010 19:20:32 +0000

As Christians, we are to measure all things by God’s Word.

God despises uneven weights and measures. Our fiat money system, like all other fiat systems, is nothing if it is not a system BASED ON “uneven weights and measures”. I suggest you check out the video “Money Creation” by Chris Martenson. He lays it out painfully well.

We have in the Old Testament more warnings against fraudulent economic dealings than I can possibly quote. The ONLY outcome possible of using a fiat system is eventual collapse. Only the fact that God is slow to anger makes this inevitable collapse slightly obscured.

Read the Word, and plan accordingly.

By: Larry Weber

Larry Weber — Sat, 18 Jul 2009 15:23:34 +0000

Like Jay, I am a student of stock market history including past manias, panics, depressions and outright deception in the market (25 years experience). My conclusion about the current environment is very different from Jay’s. This crash is different than any other in history because of the extreme leverage and outright deception in the financial system. There is an estimated 500 trillion in derivatives that can explode at any time. Warren Buffet calls these “investments” weapons of financial mass destruction. In addition, private equity firms have what are called covenant lite loans that are similiar to sub prime funding. These type of loans have not exploded yet. If they do, we will have more financial heartache. Moreover, there are thousands of adjustable rate mortgages/interest only mortgages due around 2011 that will be very hard for most home owners to refinance so its likely that more defaults are on the way. Buy and hold is not always the best strategy like Jay mentioned. In “normal times”, you can buy and hold some simple index funds and with proper allocation you’ll probably beat 95 of all “professional” money managers over the long term. However, there are times when an allocation to the cash position is smart and the best investment strategy. We reallocated over 90 percent of our portfolio to cash prior to the crash because of potential issues with sub prime issues, excessive debt in the system and funny accounting practices that the SEC and other oversight organizations don’t have the power to change. The clues to these type of impending financial issues in our system are in state banking regulator reports and other investment oversight documents. A simple allocation to cash prior to 2008 would have saved billions in personal and public pension dollars. Most institutional investors and planners got it wrong and I don’t believe tradtional buy and hold is the answer in certain extraordinary times. Every so often there are events like this one in history that have clear signs of impending danger i.e., excessive debt, over valuation of the market, accounting deception, derivative leverage etc. that makes buy and hold the very worst strategy. The problem is that most investment professionals get complacent and are not trained to see the exceptions on the horizon. Buy and hold is not the Holy Grail that it is made out to be. There are exceptions to this strategy. Ultimately our faith as Christians is in Jesus Christ not the buy and hold philosophy.

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By: GOLDIE

GOLDIE — Tue, 10 Feb 2009 06:53:02 +0000

i had about 16k on my 401k from my previous job. when i left the job, i have not put any money on it. it was accumulating the past 5years and now when i check my statement, it’s down to zero balance. what does it really mean? have i lost the whole amount or am i still with the game? is there hope that the money i had in that account will recover? i really don’t know what zero balance means. please help explain. thanks

By: just todd

just todd — Mon, 15 Dec 2008 05:29:19 +0000

Being down that much, I don’t think you have any choice but to “stay the course.” I might consider rebalancing, depending on your long and short-term goals.

Regardless of the amount one happens to be down, I think staying the course is the best action.

The biggest concern I have are all the similarities to 1929, and the Great Depression that followed. Remember, it took the market almost 15 YEARS to recover.

“Stay the Course,” but “Make Ready for Rough Weather.”

By: brother 3

brother 3 — Wed, 26 Nov 2008 04:39:11 +0000

I also lose a lot of money in my 401k,I agree that as other person with similar situation have no choice but stay in hopefully will recover some lose before retire,but we should learn a lesion why don’t watch our money like david when sense the crise is comeing get out from stock and wait price is right and put back then will make big gain.I blam mysel not to aware enough.

By: bob

bob — Wed, 12 Nov 2008 15:37:30 +0000

@Terry
If I were 59 I think I would agree with you that it might not be worth riding it out. Having probably 30+ years til retirement myself, I don’t really have any other options than to ride it out. My alternative is to pull out the few remaining dollars and throw it under my mattress only to watch in get eaten away by inflation.
Personally I still think we are going to see a nice recovery from this current recession that will offset the loses that people have had, but I have no idea how long it will take.

By: Terry Wasson

Terry Wasson — Wed, 12 Nov 2008 14:46:10 +0000

The ” Stay the Course ” advice has hurt many people. I lost $150.000 by staying in. This is
not your typical downturn and there is a real chance to lose everything.
I am 59 years old and there is very little chance I will recover even a small fraction of what I lost.
I have ruined my future by “Staying the Course”
and riding out the storm.