wassup with our economy?

[Beachboy]

with the DOW going crazy I need some advice. 401K has lost a lot of money in past month. What should one do when this happens to their 401K?

[Rob Tucker]

you should relax and wait for things to change in the other direction. Everything moves in cycles.

[Frankie Stapleton]

Rob's absolutely correct! Don't panic; wait for the longer term.

[tada]

yeah the Dow hit 14,000 2-3 weeks ago and we was cruisin but now I'd say 14,000 is the cap and I'd sell if we hit 14,000 again. now Cramer saying Bernanke going cut fed rates in October. Everybody trying to figure out Bernanke now???

Others want to make friends- I just want to make money.
James Cramer

[Jared I]

I think its a shame that companies went from pensions to 401K, its just wrong in so many ways. The avg person can't balance a check book yet they are required to manage their retirement. If you dont have a finance background, its hard to understand the market and its mechs. Knowledge is power, start reading, follow an advisor/fund manager you like and understand. If you have very little knowledge indexs are your friend.

The market is cyclical, but if you go out at the bottom of a cycle you are screwed. The market is like anything else it takes time to be good at it. If you dont want to dedicate time to studying the market, work hard live below your means and sock away monies in laddered CDs, your grandparents did it, you can too.

[David M]

Remember, the number changes on paper don't really count. You made or lost money only if you actually sold.

David

Ninole Resident

[Hotzcatz]

Most of the panic in the market is from the failing sub prime mortgage companies which are now starting to bleed over into the primes and the rest of the financial markets. The Fed said it was "contained" but now the European market is spooked. At this point, it could go either way, it doesn't seem driven by the numbers but driven by panic.

Since the market has hit a high of 14,000 last month, obviously there is more room to fall than room to rise. Technically, this still isn't a market "correction" yet since the change is less than 10%.

What was your 401K in? REITS? Mortgage backed securities? Many financial pundits say treasury notes would be a safe choice at this moment.

[Fishboy]

quote:

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with the DOW going crazy I need some advice. 401K has lost a lot of money in past month. What should one do when this happens to their 401K?

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Beachboy,
All of the responses you've gotten here are correct, and I'd like to add just one more. My portfolio is well-balanced with money in several sectors. While the market went way up and way down these past few weeks, I've lost money (a lot!), but the overall impact has been buffered by my diversification. I looked at the weekly stock\mutual fund summaries this morning (Saturday), and my investments are all up and down; the bottom line is unchanged.

Don't sweat the daily or weekly market shifts, and I know this isn't easy. But, if your 401K is diversified, you should see the same buffering.

By the way, if you're new to investing I highly recommend getting yourself a broker. Some people will say this is a waste of money but, for those like myself who do not have either the time or inclination for stock education, the advice you get is worth gold.

Mahalo nui loa,
Brian and Mary
Lynnwood, WA\Discovery Harbour