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        New Message Board Archives >> 2006 General Board Posts >> 401K Question............. (not CH)
        
(Message started by: Woobie on Jul 25^th, 2006, 12:23am)

Title: 401K Question............. (not CH)
Post by Woobie on Jul 25^th, 2006, 12:23am

OK.... I know nothing about stocks, bonds, mutual funds... or anything financial like that.......

I am 34 - and broke... but i have a 401K from work. The money comes out of my check.. the max I can take out - like 15%.

I put it all in the "stable" fund.... ONLY because I dont know HOW to make money at it. There's all these options and I dont know what they mean or what they are..... if they're risky or not. The more I read about them, the more confused I get.

I'm hoping that one of you brilliant clusterheads (or supporters) can tell me something that I understand.

Here's the options. It's a Wells Fargo 401K.

Wells Fargo Stable Return G - where I have 100% of all my money... and i made a whopping $23.00 last quarter.. LMAO [smiley=laugh.gif]

American Century Government BD

PIMCO Total Return

WF ADVTG Growth Balanced - ADM

MFS Total Return

Wells Fargo S&P 500 Index N

AIM Small Cap Growth

Oakmark International

OK - so wtf??

So - considering that I'm 34, have 2 kids and a husband (who does NOT have a 401K). I have a total of $3700.00 in the account right now, and I'm broke and need to make money - but CANT afford to lose a lot of money...

Also take into consideration that I will probably be disabled in a few years (if things keep going like they are right now)... so I don't think that I have another 30 years to make the money. I put in the max that my company will allow me to...

I did the calculator they have on their site - the one that tells you how much money you'll need for retirement... and I'll need like a bagillion dollars. I dont see it happening with my stable account. LOL

What would you do??

If you dont want to tell me what to do - maybe someone can atleast explain what these accounts are? In stupid-people terms.....

I love you guys
woobie :-*

Title: Re: 401K Question............. (not CH)
Post by kissmyglass on Jul 25^th, 2006, 1:31am

keep 50% where it is (no risk of losing)
Put 30% in S&P 500 index ( a little risk but it's the index all the traders try to beat and almost always makes $$)
20% in the AIM small cap growth ( high risk -high reward)

Personally if it were mine, I would do
70% S&P
15% where you have it and
15% small cap
Good Luck!

Title: Re: 401K Question............. (not CH)Wells Fargo
Post by georgej on Jul 25^th, 2006, 1:54am

Hmm. Well, they all carry loads, but making the best of it,

50% Wells Fargo 500 Index N

25% AIM Small Cap Growth

25% Oakmark International

I'm in with asset allocation and index mutual funds. Roth IRA's, at this point.

Your mileage may vary.

I think in large measure that kissmyglass and I are pretty much on the same page.

Best regards,

George

Title: Re: 401K Question............. (not CH)
Post by BlueMeanie on Jul 25^th, 2006, 2:26am

Tina,

There should be an internet site that allows you to move your money around. It will show you daily earnings in each of the category, along with 5 and 10 year past returns. Right now you're not going to make more than 3% annual return on your investment by putting all your cash in stable funds.

Just today alone, you would have made $800 if you had it all in the small cap growth fund. Of course you could loose that much a day too. Over the long haul, the S&P and Small Cap funds are a pretty safe bet with the highest potential. If they where to fail, the whole market would fail. The bonds haven't made money for quiet some time now and probably isn't a good investment. The way you have them listed is in order as to least to most RISK. Which also means the least and most POTENTIAL.

My suggestion is 25% stable, 25% balanced, 25% small caps, and 25% S&P.

Title: Re: 401K Question............. (not CH)
Post by Woobie on Jul 25^th, 2006, 2:29am

Yeah - they have a website, and i can change my stuff at any time.........

I just dont know what to do. I'm scared to lose money, but i guess without risk i cant make any - right?

shit.

thanks for all your input........... i am gonna see what everyone says and see what the majority say.
lol

i'm such a putz. [smiley=laugh.gif]

Title: Re: 401K Question............. (not CH)
Post by georgej on Jul 25^th, 2006, 2:32am

on 07/25/06 at 02:26:56, BlueMeanie wrote:

My suggestion is 25% stable, 25% balanced, 25% small caps, and 25% S&P.

Also a good suggestion. But you're only 34, and you can absorb a little more risk at this point IMHO. Not disagreeing--only looking at it from another side.

Best,

George

Title: Re: 401K Question............. (not CH)
Post by brewcrew on Jul 25^th, 2006, 7:38am

My macro advice would be that you take more risk when you're young, and as you progress toward retirement age, you gradually move your earnings into the "safe" funds. I'm 45 and have 30% of my 401k in T-Bills, 70% in the stock market. Very soon I'll move another 5-10% from the stock market into T-bills. By the time I retire (hopefully by 55), 80-90% will be where the daily fluctuations of the market can't hurt me.

These other guys know a lot more about this shit than I do, however.

Bill

Title: Re: 401K Question............. (not CH)
Post by john_d on Jul 25^th, 2006, 8:53am

However you choose to invest I would set it and forget it except maybe once a year. If you are anxious to see those kind funds grow and you watch it day to day, you will go nuts, especially these days.

Title: Re: 401K Question............. (not CH)
Post by georgej on Jul 25^th, 2006, 9:03am

See? This stuff isn't so difficult. It really isn't. It's just "Monopoly".

The great thing about asset allocation is that you don't have to be up on the market, or even know anything about it--you put your money in, and then let it sit there. The idea is that you spread your risk into different sectors of the market that are as unrelated as possible--for example, S&P 500, Small Cap, and/or International stocks. (Just an example, mind you.)

You can look at it each day if you like, or once a year if you're so inclined. Each day, one sector may do well, and another might tank. But you look at the whole package, not each sector. Some things'll make money, some will lose money, but on the whole you'll most likely continue on an upward trend, unless Armageddon occurs, in which case money won't matter anyway.

The most important thing, and the hardest thing to do, is to NOT FREAK OUT. You don't want to think--"well, hmm...Internationals could suck a golfball through a hose this past six months...I think I'd better move all that stuff over to S&P's, where I made money." All that happens is that you're putting your eggs in a single basket and increasing your overall risk. Besides--Internationals might explode through the ceiling next month, and you could gain back everything you lost in a few days and be kicking yourself. You don't know what's going to happen.

More importantly, I don't think anyone really does. That's why (personally) I like index funds. (Unfortunately, they are mostly not available to you in your present situation.) They follow the market index, and are not managed. So the fees are lower. Why give a fund manager big chunks of your profits? Especially since most fund managers don't do any better at guessing the market trends than a chimpanzee throwing darts at a dartboard. Few and far between are the managed funds that outperform the index. Those that do mostly can't do it consistently from year to year. Some managed funds do A LOT worse than the index. Check out the statistics.

So anyway, that's the "short" answer from my perspective--and it's only my opinion. You have to make the best decisions that work for you about your own money.

Yeesh. Sorry this is so long.

George

Title: Re: 401K Question............. (not CH)
Post by BMoneeTheMoneeMan on Jul 25^th, 2006, 9:53am

Hey Woobs,
I am a licensed stock broker and worked on Wall St for years. I can help you with this, no prob.

How about you PM me your # and tomorrow I can call you (wednesday). Lemme know what is a good time to call, and what time zone you are in.

Have a good one, Doll.
B$

Title: Re: 401K Question............. (not CH)
Post by thomas on Jul 25^th, 2006, 10:32am

AIM Small Cap growth has the highest earning potential, of what you have available to you. But it also has the greatest risk. They didn't do so well a couple of years ago. But the original AIM growth fund was a huge success, so much so that they had to close it to any new monies a few years after it's inception. THAT'S where I'd put MY money. But I like the whole risk/reward thing and I have plenty of earning years left in order to make up for a disaster or two.

Title: Re: 401K Question............. (not CH)
Post by Jimmy_B. on Jul 25^th, 2006, 10:58am

on 07/25/06 at 00:23:48, Woobie wrote:

and i made a whopping $23.00 last quarter.. LMAO [smiley=laugh.gif]

You still made more then my 401K...this past quarter sucked. I would've been happy just being in the Black.

Title: Re: 401K Question............. (not CH)
Post by Peppermint on Jul 25^th, 2006, 11:15pm

Woobs, hope you got the help you needed...
Didn't see a Real Estate fund listed, but let me tell ya, they do usually do reaaaally well 8)

Pep

P.S. Diversify, diversify, diversify! http://smilies.vidahost.com/otn/other/yleyes.gif