Question:

Falling 401K?

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I am far from being a financial guru and had my money divided up 50% aggressive and 50% something else. A general fund or something. Last year it dropped about 25%. I reallocated it to 35% aggressive 35% general and 30% global I think. In the past two weeks it has dropped about 10% I guess; we cannot all be losing money. I do not have commidities as a choice for my money. Just a bunch of different funds. With my luck it was all invested in sub-prime stuff. What kind of thing are going up?

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3 ANSWERS


  1. You have not said how old you are (and that matters for investing--the younger you are, the more agressive you can be), but I'll assume you are pretty young.

    Agressive means agressive!  When it goes up it goes up fast, but when it goes down, it can drop like a rock.  If you are young, you have time for this type of investment to pay off, so keep doing it.  When it is low, you are buying a larger number of shares that will eventually go up in value.

    I'm not sure what "general" means, so I can't comment there.  And "global" is still a solid play for the future.  So keep on investing, don't look more than once a quarter, and you will reap the rewards when you get ready to retire.


  2. Sit tight and ride it out.  As long as your time horizon is long-term (10+ years) you'll do just fine.  Think of it this way, when the market is down, your contributions are buying more shares than before so when the economy rebounds (and it will, just as it always does), you benefit from the bull market that much more.

  3. I'm not a financial guru myself, but my best advice is to ride out the storm.   I'm losing money like it is my job, but fidelity is controlling my portions which I have at 90% aggressive.  Just don't look at your 401K often, I check mine once a month at the most.
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