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401k strategies

mkingmking
edited August 2007 in The Economy
I would love to be able to be in an all cash position now, although in major trouble even banks can fail.

i have a 401k plan that is based on a pool of different mutual funds, and i can move money between the funds. i cant simply cash out without major penalties.

i would like to hear any input as the best place to "hide" in mutual funds to minimize my losses in the coming months.

i have already moved from a very balanced mix to concentrating in asian markets, value stocks, and a "cash" fund that is based on commercial paper, not mortgage backed securities.

any one have any other suggestions?

thanks

Comments

  • AlanAlan
    How much risk does inflation create for a large cash position?
  • rose-colored-coolaidrose-colored-coolaid
    You should consider diversifying beyond Asian markets. BRIC includes Brazil and Russia for example. In fact, most of the world will probably meet or beat US performance over the next 5-10 years, so take your pick.
  • carlislematthewcarlislematthew
    rose-colored-coolaid wrote:
    You should consider diversifying beyond Asian markets. BRIC includes Brazil and Russia for example. In fact, most of the world will probably meet or beat US performance over the next 5-10 years, so take your pick.

    Considering the dollar is at an all-time low compared to some other currencies, I'm not sure that parking money in foreign companies is a good bet either.

    My Internet-Expert recommendation is to stick to those funds that they recommend to retired people. "Income" funds, or other such boring things like that.

    YMMV
  • JazenJazen
    Dodge and Cox.
  • snigletsniglet
    edited August 2007
    Unfortunately, most 401K plans don't have any truly "safe" funds for people to invest in. My company's plan, for example, doesn't have any US treasury or gold investment vehicles. I've looked over all the bond funds on offer and discovered that they all claim to invest in unspecified corporate or real-estate securities. For all I know this could include CDOs or AAA tranches of sub-prime paper.

    Worse, even the money market offered by my 401K has an opaque investment strategy. I even called the broker running the 401K plan and was told that the details I seek (i.e. about whether any CDOs are in the portfolios) aren't to be had.

    It's enough to make me consider cancelling my 401K contributions and just sticking the money in T-bills.
  • bilirubenbiliruben
    Sentinel, a money market manager, just halted redemptions. They were buying CDOs.

    I just cashed out of my money market. I think I'll go down to the bank and buy a CD or treasuries.
  • bilirubenbiliruben
    I'm actually starting to feel better about the stocks I own than anything else. At least I know there is a company behind it instead of some ethereal derivative molded by some pointed headed geek fresh out of the University of Phoenix who's never seen prices decline before.
  • rose-colored-coolaidrose-colored-coolaid
    Isn't that awful? That it's a good feeling knowing you probably won't loose more than 60% of your stock value.
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