My 401k is tanking! What to do?
Magellan
lis asked:
I’m 28 y/o. I’m told to stay and wait it out. But I get so nervous seeing my 401k tank by more than 25%. I have investments in Fidelity Magellan which invest in AIG. And my investments in overseas stocks just tanked as well!!
I’m 28 y/o. I’m told to stay and wait it out. But I get so nervous seeing my 401k tank by more than 25%. I have investments in Fidelity Magellan which invest in AIG. And my investments in overseas stocks just tanked as well!!
I just need some re-assurance that staying and holding out is the right decision.
Oh, I do not get a matching contribution.
Edward
March 18th, 2009 at 1:04 pm
time to vote the present congress men out
they are men of greed who are responsible .
take it as a part of ups and downs of life and watch do not panic
March 19th, 2009 at 10:04 am
Don’t panic. You’re young; you have plenty of time to make it up. Historically, after major drops, there are major gains, so just wait it out. Don’t sell at the bottom. If you have extra money, you should be buying more.
At times like these, I turn off my TV and don’t look at the Internet, and I feel a whole lot better.
March 20th, 2009 at 8:54 am
Hold on and hope. 25% loss is not so bad as some have been getting, and if you are able to wait at least 5 years before taking the money out you will probably see an overall gain.
March 23rd, 2009 at 8:46 am
Look you don’t need to get upset. If you’re 28 you’re probably not going to retire for many years. Right? When unit prices drop your money is buying more for you. Down the road when the market rebounds the value of your entire group of funds should go up and you should see tremendous gains. The key is don’t get nervous about investments that are in the tank today when you’re in it for the long haul (30-40yrs most likely).
March 25th, 2009 at 3:18 am
Your 401k is not gaining value when the market goes up. It does not loose value when the market goes down. In fact it has no value at all until you withdraw the money. If you do that now, you will set the value below where it really should be, pay penalties and taxes.
What you may want to do, is reassess how your money is being invested. If you have been happy with the investments before you probably will once the market comes back. In the meantime you are still buying stock but now at greatly discounted prices. This is what is known as “Buying Low”. That is the right move.
If you wait until you are close to retirement age you will ’sell high”. Again, that is the right move.
Relax. This will be a painful period of time; possibly another few years or so. But in the long haul, this is probably a boom for all people who are not at retirement age. Remember, your 401k is still purchsing stocks but now they are at bargain basement prices. In 10 years time you could easily see a 50% increase in the value of these purchases.
*
March 25th, 2009 at 9:37 pm
My guess is what ever company you are working for is matching your 401k contribution. So over all you’re not really loosing any money. Your just not making as much as you used to.
Addon
*ewww sorry then . Just me but i would never put money in to a 401k unless i got a match. Good luck. It has to get better as if it doesn’t we’re so screwed it’s not going to matter anymore.
March 27th, 2009 at 2:43 am
go into govt bond funds