401K to 201K – Next Stop 101K ?

Our hope of a better stock market in 2009 is off to a rocky start.  January goes down in the record books as the worst January EVER.  If the old adage “so goes January – so goes the year holds true” why are we playing this game?  If you aren’t asking yourself that question – maybe you should.

In the February 25, 2008 Time & Money Report, I said the following:

For the ones of you that are stuck in 401K plans, I still think that cash is the best place for now. The S&P 500 is down 7.9% for the year. Last time I checked 0% is better than negative 7.9%. If you have an option of moving your money into a self-directed IRA; I would do it in a nanosecond. Most 401K plans are so limited that it is hard to take advantage of the part of the market that is working now (Natural Resource Stocks). If the S&P 500 can break 1400 – then standard 401K options can be considered again.

After only 30 days, the S&P 500 is already down 8.6%.  Does that sound like déjà vu?  Continue reading “401K to 201K – Next Stop 101K ?”

Look out Wall Street: Investors Are Getting Fed Up

Lifecycle funds are Wall Street’s latest concoction for the average investor.  These funds invest in a combination of equity, fixed-income and short term funds.  The funds use an automatic asset allocation strategy that becomes increasingly more conservative as one’s retirement date approaches.  Since most set their allocation when joining a 401K plan and occasionally make adjustments, this product ensures that a person always has the appropriate asset mix.

On the surface, this appears to be a win-win deal.  The investor is always in the right mix of assets – in essence improving their returns.  Wall Street converts haphazard adjustments into a nice predictable fee generating event.  So, how are these products performing this year?

Continue reading “Look out Wall Street: Investors Are Getting Fed Up”