Comments on: Should i change my 401K contribution due to the possible recession? http://www.secretfinance.com/blog/should-i-change-my-401k-contribution-due-to-the-possible-recession/ Thu, 17 May 2012 20:59:56 +0000 http://wordpress.org/?v=2.7 hourly 1 By: jebediabartlett http://www.secretfinance.com/blog/should-i-change-my-401k-contribution-due-to-the-possible-recession/comment-page-1/#comment-1913 jebediabartlett Fri, 15 May 2009 01:20:06 +0000 http://www.secretfinance.com/blog/should-i-change-my-401k-contribution-due-to-the-possible-recession/#comment-1913 It wouldn't hurt to ease off your " aggressive" investments..( they are probably your biggest losers day after day)... ease into something " blended" or " balanced" for three to six months. One aggressive area that you wouldn't get out of would be " international"...they are only reacting to America's woes right now...they will get back to business quickly and recover long before most things here do. Good luck. P.S. With that 25 year horizon that you mention...you could just let things ride...these downturns are just blips on that kind of a " chart"....but then again, if you want to be active, why give away money every day? Just a little tweaking would help. It wouldn’t hurt to ease off your ” aggressive” investments..( they are probably your biggest losers day after day)… ease into something ” blended” or ” balanced” for three to six months.
One aggressive area that you wouldn’t get out of would be ” international”…they are only reacting to America’s woes right now…they will get back to business quickly and recover long before most things here do.
Good luck.
P.S. With that 25 year horizon that you mention…you could just let things ride…these downturns are just blips on that kind of a ” chart”….but then again, if you want to be active, why give away money every day? Just a little tweaking would help.

]]> By: The Shadow http://www.secretfinance.com/blog/should-i-change-my-401k-contribution-due-to-the-possible-recession/comment-page-1/#comment-1912 The Shadow Fri, 15 May 2009 00:50:59 +0000 http://www.secretfinance.com/blog/should-i-change-my-401k-contribution-due-to-the-possible-recession/#comment-1912 Not necessarily. No one can time the market. You've already lost some money because you missed the top of the market and you'll probably miss some gains later because you won't be able to time the bottom either. If you have a 25 year time horizon, you can actually make money by continuing to buy when prices go down. You'll be getting more shares of your funds for the same amount of money. (This is called "dollar cost averaging" because it reduces your overall cost of your shares.) When the market recovers, you will have a greater number of shares increasing in value. I bought funds agressively after the stock market crash in 1987 (when many people that it was insane) and I profited handsomely from it. By trying to time the market, you risk selling when the market is low and buying back in when it's high. That's exactly the opposite of how you make money. Not necessarily. No one can time the market. You’ve already lost some money because you missed the top of the market and you’ll probably miss some gains later because you won’t be able to time the bottom either.

If you have a 25 year time horizon, you can actually make money by continuing to buy when prices go down. You’ll be getting more shares of your funds for the same amount of money. (This is called “dollar cost averaging” because it reduces your overall cost of your shares.) When the market recovers, you will have a greater number of shares increasing in value. I bought funds agressively after the stock market crash in 1987 (when many people that it was insane) and I profited handsomely from it.

By trying to time the market, you risk selling when the market is low and buying back in when it’s high. That’s exactly the opposite of how you make money.

]]> By: engineer50 http://www.secretfinance.com/blog/should-i-change-my-401k-contribution-due-to-the-possible-recession/comment-page-1/#comment-1911 engineer50 Tue, 12 May 2009 11:38:13 +0000 http://www.secretfinance.com/blog/should-i-change-my-401k-contribution-due-to-the-possible-recession/#comment-1911 That is the worst mistake you can make - keep up regular contributions regardless of market ups and downs. If you want to adjust your investment asset allocation, that is another matter. That is the worst mistake you can make - keep up regular contributions regardless of market ups and downs. If you want to adjust your investment asset allocation, that is another matter.

]]> By: kevin h http://www.secretfinance.com/blog/should-i-change-my-401k-contribution-due-to-the-possible-recession/comment-page-1/#comment-1910 kevin h Sat, 09 May 2009 01:32:24 +0000 http://www.secretfinance.com/blog/should-i-change-my-401k-contribution-due-to-the-possible-recession/#comment-1910 If you can make investments now, just keep doing it. A recession now, is very, very unlikely to have much affect 25 years from now. If you can make investments now, just keep doing it. A recession now, is very, very unlikely to have much affect 25 years from now.

]]> By: donald e http://www.secretfinance.com/blog/should-i-change-my-401k-contribution-due-to-the-possible-recession/comment-page-1/#comment-1909 donald e Wed, 06 May 2009 05:58:34 +0000 http://www.secretfinance.com/blog/should-i-change-my-401k-contribution-due-to-the-possible-recession/#comment-1909 if u can afford it dont change ur deduction but change ur allocation of investments to a more moderate risk then aggressive. dont forget the tax benefits to the 401 investment as it is taken pre taxed so dont reduce just reallocate. if u can afford it dont change ur deduction but change ur allocation of investments to a more moderate risk then aggressive. dont forget the tax benefits to the 401 investment as it is taken pre taxed so dont reduce just reallocate.

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