The market is a roller coaster right now. Nobody gets hurt riding a roller coaster. The only time you get hurt is when you jump off. The market will come back and it historically has always come back strong. I rode this baby down and I am going to ride it back up. I continue to buy into the lower market so that I will have a lower average cost of investment long term which should help when the market does start to grow again.
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'04 MS/Blk - Z06Fest IV, V, VI, VII & VIII - WinterFest I "Bus Driver"
But Mike's et al advice of staying put, now, is pretty much our ONLY option...
However, this rollercoaster CAN flatten out, or REALLY swoop, depending on what happens with the Detroit 3...
IF they fall, God Bless '09...
...and the clock is ticking...LOUD and clear...
__________________ PowerPro01 sez "STAY TUNED"................ GarettO's the SigGod! "NOTHING Matters...until you CARE..." Bob Gibson If RACING was EASY, they'd call it WINNING ! Anonymous
Well my understanding is that this point in time of OUR history the world market has never owned as much of the American stock, real estate and U.S currancey. My whole concern is why invest in your future on pure speculation. i tend to believe that the 401K was designed to hook ,line and sinker the american worker into a much grander retirement plan. we all tend to want more and that is what i think sold the whole idea.
Now if your going to invest in stocks good, bonds, gold better. but there is to much going on to just let it ride for the sake of the past history. Although i do agree with Mike's point but our economy has not been in this situation before or at least to this magnitude. one more thing i just think that it should have been privatized just like lil bush was trying to do ( if that was his plan). Godspeed. just my opinoin i'm definitly noy an expert. i do have stocks and bonds because thats what i wanted to invest in but jump on the 401K band wagon as well.
Last edited by Redshift Z : 11-20-2008 at 07:14 AM.
Well my understanding is that this point in time of OUR history the world market has never owned as much of the American stock, real estate and U.S currancey. My whole concern is why invest in your future on pure speculation.
While admitting that stocks, bonds, etc are certainly non-secured risks and subject to gains and losses, I'm not sure that calling them "pure speculation" isn't a bit of overkill. There is enough historical past to make them viable alternatives for investors. While I rarely invest in individual stocks myself (almost all of my investments are mutual funds), there is enough available documentation on the assets/profitablity of companies to make wise decisions whether you're buying individual stocks or measuring the stock portfolio of a particular fund to make it somewhat less than "pure speculation". The same goes for bond funds except you are measuring those companies abilities to repay debt.
Quote:
i tend to believe that the 401K was designed to hook ,line and sinker the american worker into a much grander retirement plan.
Actually the 401k plan wasn't based upon any new legislation or an offshoot of any administrations particular agenda.
The term '401k' is really nothing more than a subsection of IRS tax code #401 which covers qualified pension, profit-sharing and stock bonus plans.
It's popularity was founded several years ago when some very bright folks in the private sector were looking for alternatives to defined benefit, defined contribution and profit sharing plans. They stumbled across this particular subsection and found a way to make it usable and popular among both employers and employees.
The reason they were looking for alternatives was that the defined benefit pension plans were becoming too expensive for many employers and the standard profit sharing arrangements were too iffy for employee tastes. They also did not allow (for the most part) any employee participation for those that wanted to take advantage of tax deferred savings. And lastly, the administration costs of these other retirement plans was very costly when compared with the costs of administering a 401k program.
I think the entire point of section 401 of the tax code was to provide the means for the working man/woman to become less dependent on Social Security and other entitlement programs after retirement....especially with the average life expectancy rising as fast as it has over the last 50 years.
Call it a self-defense mechanism for government. If workers are allowed and even enticed to save for their own retirement, there is less pressure for future demands on the government to raise Social Security (and other entitlements) to keep up with inflation and a rising standard of living.
well i'm just concerned only on my part ecpesially cause i'm 29 and approaching the BIG 30, but when you look at it that way your a 100% correct. would you say since the inception of the 401K that the stock market has increases very well across the board. the only thing i don't like is the whole relationship with the IRS. i know taxes help the government but it seems that it has become almost industry. there are so many new "facilities" that we are supporting now with the overwhelming influx of monies. i think inflation is always going to be ahead of us because of new technologies and high demands. naturaly.
well I'm just concerned only on my part especially cause I'm 29 and approaching the BIG 30, but when you look at it that way your a 100% correct. would you say since the inception of the 401K that the stock market has increases very well across the board. the only thing i don't like is the whole relationship with the IRS. i know taxes help the government but it seems that it has become almost industry. there are so many new "facilities" that we are supporting now with the overwhelming influx of monies. i think inflation is always going to be ahead of us because of new technologies and high demands. naturally.
Let me see if I can answer your questions properly...
First, I would agree 100% that the amount of money in the market has increased dramatically since the 'advent' (for lack of a better term) of the 401k programs.
However, maybe not for the reasons you think.
Most defined benefit and defined contribution pension plans had their monies invested in the market and many, if not most of the standard Profit Sharing plans did as well.
The difference being that after the discovery of the 401k program, hundreds of thousand of companies established retirement programs that didn't have them before. Primarily only bigger companies (500+ employees) had pension or profit sharing plans due to the required financial commitment as well as the fairly large company expenditures to administer these programs. Annual IRS and DOL reporting requirements were enough to scare most smaller businesses away.
The 401k plan on the other hand does not require near the amount of financial commitment and administrative cost and reporting requirements are no longer intimidating. Now companies with as few as 25 to 50 employees can have a viable retirement program and many of them have jumped on that band wagon. Even mom & pop companies (25 employees or less) can start a program very similar to the 401k. It's called a SEP/IRA (Simplified Employee Pension) and shares most of the characteristics of the 401k plan.
This is far from an IRS or government gimmick and there is no "relationship with the IRS" except to take advantage of a section of the current tax laws. In fact in the old days people might have referred to it as a tax loophole. It is very simply a way in which employees can put away tax deductible dollars ( many employers match some part of the employee contribution and their match is also tax deductible) and in addition to the tax deduction, your accumulation and growth is tax deferred.
The only downside I can see of a 401k plan is some of the suggestions made by President-elect Obama during his campaign that too many tax dollars were NOT being collected due to these plans and that he may try and curtail or even discontinue them. I'm not real worried though because I'm almost certain that they could not get that change in the tax code without a huge revolt coming from individuals and businesses alike all over the country.
The key to remember here is that the 401k plans are NOT tax revenue sources, but are in fact just the opposite!
Mike....God bless you and I am glad you are able to sit and have this discussion with the likes of us. my company is family owned so my parents are the ones who are really going to feel the brunt of the force. I guess my feeling for the investments not being a 100% secure and seeing what's going to happen to friends and family is what truly sparks my rage towards these ideas. my girlfriend works for Prudential Financial and she tells me not to worry same as you guys but you know?
Jub, if I'm not being too nosy...what fund are you talking about?
My 401 is with Fidelity and the large cap I'm talking about is the Contra Fund. Morningstar ranked it 5 stars so it's a good performer when things are going well.
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