retirement fund allocations

[nostatic]

My retirement fund took a pretty nasty hit (as most did), especially since 1oct08 - down like 17%. I've changed my allocation into mostly guaranteed annuity with smaller percentages in stock and growth.

So what's the collective wisdom of where to allocate now. Every month more shares are bought, and I have a fair amount of chioce (annuity, bond, stock, equity, growth, international stock, real estate, etc). I'm not retiring anytime soon and figure that at some point I'll want to get a little more aggressive and get back into global equity and growth, but I'm thinking we're going to continue to freefall in those areas for at least a few more months (or years).

Anyone changed their allocations?

[SCWDP911]

sub'd

[cl8ton]

I am 25% into money markets (prior to the big bang) and the rest (was trapped) in domestic and foreign markets (down 19+%)
Waiting a few more weeks and will dollar cost avg back into the markets (according to my UBS rep)

My personnel 401k was changed entirely to guaranteed annuity 1 month ago, got hit by one bullet but dodged a few others kinda...sorta...

[nostatic]

I was 57% equities, 7% fixed income and 36% guaranteed. I just moved it to 60% guaranteed, 7% fixed and the rest equities. Then see where it goes. I usually don't muck around too much with this as it is a long-term thing but I get the feeling the equities will continue to slide for another couple quarters.

[masraum]

I'm a rank novice at financial stuff, so this is my $.002 worth.

To me it seems like there are a few options, and I don't know that any are better than the other, they're just different.

Since you say you're not retiring any time soon, it seems you aren't too worried about a hit now since you should have time for them to come back up before you are ready. You could go the ultra conservative route and get bonds or something that has a slow steady interest rate, but I believe that inflation is expected to rear it's head, and that isn't good for investments that are slow and stable.

You could go with stocks assuming that what you're buying now while the market is low will go up at some point (who knows how long that will take) which could be really nice in the long run.

You could go with something like precious metals. My understanding is that when the market is bear that precious metals do well.

I think the problem is that it depends upon what sort of investor you are, how much risk are you willing to accept vs how aggressive you want to be.

I'm not a gambler, and I'm fairly young, 38. But I'm prepared to be more aggressive.

Like I said, I'm a Novice, but I'm trying to educate myself. I just wish I had started sooner.

I'm interested to see what some of the more experienced guys think about your question.

Also, if anything that I've said is way off base, someone please let me know.

[TerryH]

I moved my stuff mostly out of the market in July of this year. My portfolio peaked a year earlier in July 07. I'm still down 11% for the year, but at least I slowed the bleeding to a drip.

60% guaranteed interest bearing a whopping 3% but at least it's not losing, and any added funds go here too.
20% bonds
20% stock

[MattKellett]

ok, my belief with retirement funds is not to change anything!!!!

When I enrolled in my company's 401k about 8 years ago, I decided then how much risk I wanted to take. In those 8 years I have done fairly well, until this last peroid where I dropped 12.3% Now I'm sure I will drop even more this next period, but I am still contributing the same amount into the same funds, and now buying at a lower value, sure it might lose some more money, and if it does I will be buying at an even lower value!!!

The things is at my age, 39, I am still comfortable with the risk level I am at with my 401k. The thing to remember is that these are long term plans. Now the older I get I will reevaluate my allocations. But my allocations will not be dictated by the swings in the market, but more by the situations in my life.

Anyway, I could be wrong, but this is how I feel comfortable, I know my risk and I realize that some times I will be making a loss, but history teaches us that in the long term it's a worthwhile investment.

[nostatic]

I'm 47 so I'm somewhat in the transition from aggressive to more conservative. The issue is that I'm thinking the next few quarters might be more than a "swing." In that case I'd like to be putting my contributions into something stable. I'll move back to equities when it seems like things have bottomed out. I having 15% of my monthly go in and still have the overall value drop. The annuities are not dropping.

[competentone]

Originally Posted by nostatic

I was 57% equities, 7% fixed income and 36% guaranteed. I just moved it to 60% guaranteed, 7% fixed and the rest equities. Then see where it goes. I usually don't muck around too much with this as it is a long-term thing but I get the feeling the equities will continue to slide for another couple quarters.

There are no "guarantees" when it comes to investing.

The "guaranteed annuity" products are some of the most mismanaged and most fraudulently-marketed financial products out there.

Avoid them like the plague.

[cl8ton]

Originally Posted by competentone

The "guaranteed annuity" products are some of the most mismanaged and most fraudulently-marketed financial products out there.
Avoid them like the plague.

So what would you suggest, competentone?

[masraum]

Originally Posted by MattKellett

ok, my belief with retirement funds is not to change anything!!!!

When I enrolled in my company's 401k about 8 years ago, I decided then how much risk I wanted to take. In those 8 years I have done fairly well, until this last peroid where I dropped 12.3% Now I'm sure I will drop even more this next period, but I am still contributing the same amount into the same funds, and now buying at a lower value, sure it might lose some more money, and if it does I will be buying at an even lower value!!!

Yes. You have a point, but there is also something else to think about.

We'll assume that you have your current investments and they are $100k, the equivalence of 5000 shares of the various investments. The market starts to drop and you loose 10%. At that time you decide to move your balance into something safer that's less likely to drop, or will at least drop a lot less than the riskier stuff that you're invested in now. The market continues to drop for a while and the Dow bottoms out at 7000 from the 11000 high mark it was at. When it gets back up to 7500 you decide to take your retirement money from the safe investment and move it back into the riskier stuff. Lets say that with interest and the drop, the value is still 90,000, you move that money back, but now, your 90,000 that was 5000 shares of the risky stuff, because the market is 20% lower than it was when you sold, is the equivalent of 6000 shares of the various investments. That was a good move and when the market climbs back out of it's hole, you'll likely have made money.

If you leave it where it is, and the market climbs back to where it is today, you won't have lost any, but you also won't have made any either.

Granted, that's probably a bit simplistic, but I don't think it's entirely wrong.

[TerryH]

Originally Posted by competentone

There are no "guarantees" when it comes to investing.

The "guaranteed annuity" products are some of the most mismanaged and most fraudulently-marketed financial products out there.

Avoid them like the plague.

The guarantee funds I'm in are simple interest bearing accounts. Just like a bank savings account. You are guaranteed to make money, just not much... lately.

[competentone]

Originally Posted by TerryH

The guarantee funds I'm in are simple interest bearing accounts. Just like a bank savings account. You are guaranteed to make money, just not much... lately.

But exactly what sort of securities are behind those funds?

Even if the "borrowers" represent a good credit risk, with the governments of the world "printing" money at unbelievable rates, how do you expect "lending" money (which is what you are doing) at fixed interest rates won't be decimated by the inflation of money supplies the governments are engaged in?

[competentone]

Originally Posted by cl8ton

So what would you suggest, competentone?

You need to understand your own financial situation and come up with solutions for your situation, but you also need to understand the wider economic issues occurring if you want to avoid being bull-dozed by them.

You need to understand that the financial industry has been overrun by thieves, "gamblers" and incompetent fools. These miscreants have used the trust built up over years by the previous legitimate businessmen to "swindle" the population out of their hard-earned savings.

The government, lead by the Treasury Department (headed up by the former CEO of Goldman Sachs -- a key participant in the destruction of the financial industry), is trying to keep the mismanagement and theft hidden by "printing" money to cover the losses.

Any investment not tied firmly to "hard assets" is at risk of destruction.

If you go to "cash" it should just be a temporary position while you wait for an opportunity to get into a position with strong "hard asset" value. ("Hard assets" in this case includes things like factories, real estate, commodities, etc. -- though one needs to be certain any companies with "hard assets" can manage any debt they have effectively.)

Avoid any "debt investments" that involves "financial firms lending to other financial firms" -- which is what most of the "guaranteed fund" money represents.

[Wickd89]

Originally Posted by TerryH

I moved my stuff mostly out of the market in July of this year. My portfolio peaked a year earlier in July 07. I'm still down 11% for the year, but at least I slowed the bleeding to a drip.

60% guaranteed interest bearing a whopping 3% but at least it's not losing, and any added funds go here too.
20% bonds
20% stock

I did the same. About a month ago I went with bonds 90% snf 10% stock for another 3 months. I will site out the next 2-6 months and get back in with 60-70% stocks again afterwards....
My move to bonds helped me sit out a lot of the chaos. I was already down 15% and stopped it.

[dtw]

Originally Posted by nostatic

I've changed my allocation into mostly guaranteed annuity.

Oh my. Are you a government employee? Nevermind, not relevant. Just seems like a lot of govt plans offer these. Go out there and do some reading. My advice is to be in 'anything but those'.

[Rob Channell]

I'm kinda leaning towards a contrarion sort of investor strategy.

First off I have a while(I hope) before I will need any of my retirement funds.

I figure the big guys do their thing first and then everyone else follows as the information gets out. Since I am a small investor I will be one of the last to know. So if the market takes a big hit they sell while it is still close to high and my sale will come later when it has dropped substantially. OK, so now it has dropped substantially and may continue to do so for a few more months (or years). I can try to time the market or I can just keep going in and be in for the next time it changes direction instead of jumping on later.

So when they are selling because the market is dropping I am thinking buy now because I will be picking it up cheaper and cheaper on the way down. Then I'll already be in when it bottoms out and rebounds instead of missing out on the large early gains that may occur when the market changes direction.

This is JMO and I stink at picking stocks. My main interest is in several Vanguard mutual funds as opposed to individual stocks. (Yes, I do know the funds hold positions in stocks. It's just that there's some goober interested in that stuff pickin'em instead of me).