• The Entrepreneur Forum | Startups | Entrepreneurship | Starting a Business | Motivation | Success
  1. Join 50,000+ entrepreneurs
    who are kicking butt and
    winning their dream life.

    Unscripted™ Entrepreneurship:
    A Business That Pays More Than Money, It Pays Time.

    "Fastlane" is an entrepreneur discussion forum based on The Unscripted Entrepreneurial Framework (TUNEF) outlined in the two best-selling books by MJ DeMarco (The Millionaire Fastlane and UNSCRIPTED™). From multimillionaires to digital nomads, the forum features real entrepreneurs creating real businesses.

    Download (Unscripted) Download (Millionaire Fastlane)  Register
    Registering for the forum removes this block!

rebalancing 401(K) account

Discussion in 'Investing/Trading/Cryptocurrency/Altcoins' started by andviv, Aug 26, 2007.

  1. andviv
    Offline

    andviv Gold Contributor Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass Summit Attendee

    Messages:
    5,411
    Likes Received:
    2,172
    Joined:
    Jul 27, 2007
    Gender:
    Male
    Location:
    Washington DC
    Rep Bank:
    $3,421
    I re balance my 401(K) --for those outside US, retirement acct-- at least twice a year. It is time for me to do it again but with the current situation in the market I am not certain what position to take.

    About me, I am in my early 30's, my 401(k) is my "plan to be poor" --i.e. backup plan and I am aggressive in my investments, risk is not something that makes me run scared, usually I see it as opportunities waiting for me.

    However I've been having the feeling I should take a more conservative position given the current fluctuations. As I have no really a clue what the managers of the funds are doing these days I feel like I am completely blind and can't see clearly what are my options.

    I am posting here some details so you can see my current situation. Please feel free to post your comments/suggestions/questions. Any help is greatly appreciated.
     
    1 person likes this.
  2. RAiMA
    Offline

    RAiMA New Contributor

    Messages:
    95
    Likes Received:
    7
    Joined:
    Aug 24, 2007
    Location:
    Sydney, Australia
    Rep Bank:
    $67
    The person who would best look after your fund would be yourself with the right education and mindset.

    I'm not sure if people are allowed to manage their own 401k, in Australia we are. 401k is called super in oz. I'm just about to take off and manage mine. I'd suggest doing the same if you're able to, but before investing in any particular sector, it's best to invest in your financial education first. After that select a vehicle, simulate the method with no capital (like paper trade, if you're doing shares), then apply it to the real world.

    There is a cost to setting up the company structures required to manage your own funds, and the other things you'll have to consider is if there is substantial capital to manage for a particular strategy in the sector you wish to apply.

    Benefits of doing this is to be in control off your funds and invest them the way you wish for the maximum returns on the risk you're prepared to take, and you're able to claim certain things like seminars, travel expenses, tax deductables equipment for the purpose of managing your retirement account. Of course, best to get these checked out by your local accountant as the laws may differ in the US.

    That's my 2c. Hope that helps.
     
    2 people like this.
  3. andviv
    Offline

    andviv Gold Contributor Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass Summit Attendee

    Messages:
    5,411
    Likes Received:
    2,172
    Joined:
    Jul 27, 2007
    Gender:
    Male
    Location:
    Washington DC
    Rep Bank:
    $3,421
    The plan I'm enrolled in does not allow me too many options, other than choosing from a small number of funds available. If I could manage mine directly I'd invest in something I understand better like RE.

    Of course I am the one that would best look after my retirement account. And of course I would do better if I had the education at this point. But I don't. That's why I am posting my current fund allocation here, open to everybody to see, to get feedback from those that know more than me in this area. I recognize I am not an expert in the market, I call myself a know-nothing in this section.

    You do make excellent points like invest in my financial education, which I've been doing for quite some time now in the area of REI. I know nothing about these types of funds. I can't complaint, last 12-months return was more than 25% with this same allocation, but I suspect that was a plan for a different market and does not apply the same to the current situation.

    And now that you mention it, what are your plans for your super plan, if you don't mind sharing?

    Thanks for your reply.
     
    3 people like this.
  4. RAiMA
    Offline

    RAiMA New Contributor

    Messages:
    95
    Likes Received:
    7
    Joined:
    Aug 24, 2007
    Location:
    Sydney, Australia
    Rep Bank:
    $67
    I'll be managing my super on the Australian stock exchange. Going long and trading with options on a low to medium risk strat. Aiming for 5% monthly returns, through researching and analyse of the opportunities at hand.

    I'll spread it out into real estate later. Will just take a while cause super managed funds aren't allowed to margin.
     
    4 people like this.
  5. JScott
    Offline

    JScott Legendary Contributor FASTLANE INSIDER Speedway Pass LEGENDARY CONTRIBUTOR

    Messages:
    3,856
    Likes Received:
    6,421
    Joined:
    Aug 24, 2007
    Rep Bank:
    $46,432
    Andviv - You probably know this, but I'll throw it out there just in case...if you have left your job that this 401k is from (or if you do in the future), you have the option to roll the 401k into an IRA. This gives you a lot more options in terms of how the money is invested.

    Again, you probably knew that, but thought I'd mention it...
     
    1 person likes this.
  6. kidgas
    Offline

    kidgas Contributor

    Messages:
    532
    Likes Received:
    49
    Joined:
    Jul 25, 2007
    Location:
    Indiana
    Rep Bank:
    $63
    I, personally, like the allocations that you have currently. Of course, no one knows the future but I think that we will continue to see a several year period of inflation if the Fed opens up the credit spigot again by lowering interest rates. Thus, your natural resources will be more costly. Also, the dollar will be hurt improving the relative performance of foreign markets when currency effects are taken into account.

    Finally, I think the most important part is that you are young and will do fine as long as you keep contributing to the account and dollar cost average. It will be 30+ years before you tap the 401(k) so you have time. It took the market 25 years to get back to even after the October '29 crash for buy and hold but only 5 years for those that dollar cost averaged.
     
    1 person likes this.
  7. andviv
    Offline

    andviv Gold Contributor Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass Summit Attendee

    Messages:
    5,411
    Likes Received:
    2,172
    Joined:
    Jul 27, 2007
    Gender:
    Male
    Location:
    Washington DC
    Rep Bank:
    $3,421
    JScott, yes, I did know that one. I'm still with the same company. I did ask them about being able to move my 401(k) now into an IRA but they said they only way was to take my money out when I leave this job.

    Kidgas, thanks for your input. I followed a similar logic when making the allocations. What's your take if the fed does not lower the rate but the opposite, if/when they raise it?

    RAiMA, based on what you mentioned I take that you are planning to be active with your account. When and how can you get your money out of your acct? here is when you are 65yrs old or before that but paying a penalty. Unless it is a Roth IRA where the gains are tax free after the same 65yrs old but the principal is yours whenever you want it to.

    Thanks all for your input.
    Anybody else?
     
  8. kidgas
    Offline

    kidgas Contributor

    Messages:
    532
    Likes Received:
    49
    Joined:
    Jul 25, 2007
    Location:
    Indiana
    Rep Bank:
    $63
    If rates go up, it is because the Fed is still concerned about inflation. In this case, the commodities (natural resources) will be going up. Thus, that portion of your portfolio should do OK. Unfortunately, inflation coupled with decreased liquidity through Fed raising will, in my estimation, stimulate a recession. This will likely knock the whole market down. This brings us back to DCA and setting yourself up for the next boom.

    If you look up my post on Kondratieff waves, you would want to pick up some bonds at the peak of the interest rate cycle. As rates begin to decline, these bonds become more valuable since they have higher interest rates.
     
  9. RAiMA
    Offline

    RAiMA New Contributor

    Messages:
    95
    Likes Received:
    7
    Joined:
    Aug 24, 2007
    Location:
    Sydney, Australia
    Rep Bank:
    $67
    It's the same as the US. I won't be able to withdrawl from the account until I'm 65, but being a self managed super fund within a company structure there is a bit more flexibility than those who don't have one. You just have to be creative at times, like setting up a joint venture with your self managed super fund company, etc.
     

Join 1000s of entrepreneurs who are rewriting life's script and winning financial freedom.

---- ----

You must be a member to join the conversation.

Create Account

Join the community fast and easy!

REGISTER

Log In

Already have an account? Login here.

LOG IN

Share This Page