Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
12K out of 45K is pretty severe. Now is a good time to be on the conservative side. The market is trading outside of fundamentals. I have taken about a 30K hit out of 300K on mine and I moved into some conservative stuff for a while. With my other funds, I have been selectively buying some quality that I (IMHO) believe is undervalued.
Refugee56 sort of said what I was going to say. Getting conservative now would be akin to locking in your loss to some extent. The time to get conservative, if you're going to do so, would be BEFORE the market drops 20+%. If it's me, and I'm still a long way from retirement, I'd ride it out at this point, continue to buy shares at cheaper prices, and wait for the inevitable rebound. If your portfolio is conservative when the market does decide to rebound, you'll miss some or all of the party.
It all depends on your time horizon!! If your in 20's or 30's dont change allocation mix. If you are above those years, you might want to consider a shift in your allocation from heavy equities to more of a mix of fixed income and equities. You want to continue putting money into your 401K at these levels, to get in at lower cost basis.
David - Thank you for responding. It was 12K out of 45K. I am currently finding out the name of the exact fund.
You should probably consider spreading over many funds. At this point it may not have helped, but in the future you don't want to be dependent on the performance of 1 fund.
The thing that frustrates me the most about my 401K is the severe trading restriction placed on it. Obviously, you can get a lot more money into your 401K than your IRA. The contribution limit is somewhere north of $14,000/year. My company matches up to 7% and then adds another 10% of my total gross income for the year as a profit-sharing contribution. This is wonderful, but they only allow for a few mutual fund trades per year.
Not only that, but when you put in a buy or sell in an IRA on a mutual fund, you know you're going to buy or sell at the next closing price. With a 401K it'll happen in a couple few days.
I feel a lot less connected to my 401K money than to my IRA money. The result is I tend to go more conservative than I maybe should for my age.
It makes no sense that if I leave my company, I can roll everything over to brokerage and have intimate control over it and buy stocks and covered options even, but if I stay with my company it's stuck in 401K and there's a big brick wall in the way.
At this point you have lost nothing, it's all a paper loss. In my opinion reacting to this economic crises by suddenly reallocating is a mistake. What will happen is you will sell at a loss and then from what you say invest in bonds or more conservative funds, and get less for your money. And then you will have a real dollar loss.
Your age and risk tolerance have alot to do with your product mix. If you are nearing retirement you should have already shifted to conservative funds. If you didn't - then shame on you. If you can't stomach the downs that happen a few times a decade (this is like the 10th economic crises/recession since WW2 I think I read) then again your risk tolerance was low and you should have been in conservative investments. But now is not a good time to change, or if you do change do it sparingly - change your new contributions and keep your old ones in the same funds.. If you are young then just ride it out, don't panic. In 20 or 30 years this will be a distant memory, and continue with your stock buying (via I assume regular stock purchases) so that you will now buy stock at a bargain price and you will have averaging of stock value.
If what some of the doomsayer nuts are saying on the other forum come true, economy will totally collapse, it won't matter where you have your money.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
