I have kept my 401K invested in stock and bond mutual funds and have lost

[MISSDem]

my a--. So today my finacial adviser said that I should move 75% of what is left to a money market fund within my 401K and the little dab left in stock (if I want to). How have you all handled this downturn as far as your personal finances? I am or will be 64 in July.

[ORDagnabbit]

1. got out 5 years ago and told everyone here to go for silver and gold.. you dont hold it...you dont

own it.

www.moneyasdebt.net

[exboyfil]

28. I went 40% in TIPS in October/November near its yield high

and I only regret listening to folks saying that the market has stabilized and not doing 60% or even 80% (3% over CPI is a heck of a return in this environment). I went back into stocks with 40% on Inaugaration Day - big mistake. I am explaining to my wife after losing 15% last year how I am down again this year even with my Bond appreciation.

[REACTIVATED IN CT]

33. I moved half into TIPS on 9/15 leaving the rest in stocks in hopes

that they will rebound someday. I have not looked at a statement since then.

[LiberalFighter]

2. I put everything into an income fund

[michreject]

57. So did I

It only paid 3%, but it paid 3%. It didn't lose money.

[mwooldri]

3. I'm 34 and yes my 401k has tanked.

How I'm doing it is simple: the 401k offers a "stable value fund" which is the closest thing you can get to a FDIC insured savings account with these things. That has NOT tanked. Further contributions to my 401K are going into the Stable Value Fund right now and if/when I feel things are right timing wise I might whack some money from the Stable Value Fund into the other more volatile funds.

I have time on my side so I'm not moving my money OUT of the funds that invest in stocks/shares. Then I'd be turning my paper losses into actual ones because right now it's a paper loss. I had paper gains - if I had the foresight then maybe I should have realized those gains then... but I didn't so... After all yes remember the stock market tanked in 1929 but a few years later a lot of it came back... so yes things will bounce back. But at 64 time might not be on your side. I am not a financial advisor... I'm sorry things turned out that way for you.

Mark.

[gristy]

4. I shifted some stock to bonds a couple months ago

Still have some in stock, and I've taken a bath overall. So you're not alone, though I am a little further from retirement than you.

[Tierra_y_Libertad]

5. Moved our IRA's to MMs about 1 year ago when the handwriting on the wall started flashing.

Two lost wars we're still fighting? My $200,000 house was "worth" $450,000?

Somethings gotta' give.

It did.

[lumberjack_jeff]

10. I bailed out in August. Glad I did, wish I'd done it three months sooner. n/t

[marybourg]

6. Until you sell, losses are only theoretical. Since we don't *need*

income from our investments right now (doing fine on SS and small pension), we're "staying the course". Everybody's situation is different and everyone's tolerance for pain is also. Good luck!

edit spelling

[MISSDem]

9. You are doing what I want to do but I'm not as corageous as you.

I told the advisor that I thought that I could live on my pension and SS but there was just silence from him. Maybe I will just stay and hold also. I hate to give up on any chance of making back what I've lost.

[hfojvt]

18. "Don't you understand what's happening here?

Potter isn't selling, he's buying. Why? Because we're panicking and he's not. He's picking up some bargains. Now we can get through this, but we've got to stick together ..." It's a Wonderful Life

[yellowdogintexas]

31. same here. Not retired yet,

for me much of the loss is kind of theoretical. What I mean is that I have x amount of $$ that came from my paychecks. Then there is another amount that came from the company. Then there is the interest those all earned over a long period of time (this is a 401K from a former employer that I just left with the account manager that was in charge of it. It has been easy to judge impact because I am no longer depositing into it.

Anyway, the losses have not gotten into the money the company put in yet. So I still made money on my initial investment. In five years when I am ready to convert it to income for retirement things may look a whole lot different.
I can safely say my money has grown more than it would have in a straight savings account.

It tanked badly in 98 and recovered, and tanked again sometime during the Boosh years and recovered so I think it will regroup again.

I have two from former employers and a current one from where I work now.

[htuttle]

7. The only market I still put money into is the small-scale commodities market

Things like 5 pound bags of potatoes and canned food -- enough to fill my cupboards, anyway.

I'm 45 and looking forward to either working until I die or warming my hands over a burning barrel of trash when I get to be your age.

If I'd only been greedier, crueler and more heartless -- I'd have done a lot better, financially speaking.

[Cynical Guy]

8. Your financial adviser should be smacked.

Unless you specifically told them you wanted to be aggressive, you should have had very little in stocks or mutual funds at your age.

[Still Sensible]

12. Absolutely. The advice is way too late.... and

now the bastard is telling you to get out and into a money market? So now if the market rebounds somewhat in the next couple years, instead of recouping some of your losses, you'll get MM rate of return? If you are healthy and don't need to tap into that for a couple years, you might want to consider riding it a little more. Or maybe split it 50-50.

If he would have given you this advice 6-8 months ago, it would have been great advice.

[Hello_Kitty]

13. She said stocks, bonds, and mutual funds

That doesn't necessarily denote an aggressive portfolio. Bonds were generally considered fairly safe until very recently, unless they were junk.

[Cynical Guy]

20. A 60 year old with any stock that isn't there for the dividend income is being aggressive.

They were somewhat diversified in their approach, way too much so for a 60 year old though.

[AllentownJake]

29. Cynical guy is right

When you hit 60 you should be moving your money out of stocks. You are preparing to use the money.

When your in your 30s to 40s you should have an agressive strategy. When you hit 60 you should be at about 10% stock and the rest in guarenteed investments that earn interest.

[marybourg]

15. At his/her age, OP could have 30 more years to support self.

Some % of stocks are necessary for inflation and contingencies. Unless one is a multimillionaire, one cannot sustain 30 years of retirement on just cash and "low risk" bonds. Just my opinion, of course. (Retired early 21 years ago and doing OK)

[Cynical Guy]

21. That is true of course.

But where was the adviser last year? Or two years ago?

This stuff has been obvious for years. Advisers are paid to be up on this thing so their customers can do what they're good at.

I should not have to be the one telling my doctor about new treatments. When I happen to know about it, and they don't, it's time to find a new doctor.

[Hello_Kitty]

25. Many advisers are glorified salespeople who are given a minimum of financial training

And a buttload of techniques to smooth talk people into whatever stock/mutual fund/investment vehicle the company they work for is trying to unload. A good friend of mine works for one of the most "respected" financial firms out there and she has all the characteristics and ethics of a snake-oil peddler. Needless to say, she's very successful but I wouldn't get advice from her if my life depended on it.

[Cynical Guy]

32. Many advisers are excellent, well trained and highly ethical people.

If an adviser can not show why they are performing worse than the index they track, the customer should be talking to another adviser.

I know somebody who manages billions in bond portfolios at Wells Fargo. She got beat up in her portfolio, but she was hurt less than the indexes she tracks due to her design of the portfolio. So even though she lost money, she lost less than the indexes. So she got a bonus. Well deserved.

[Hello_Kitty]

38. You are talking a way higher level than the average middle-class person interfaces with

I'm talking the person who makes $50K a year as a mechanic or secretary and goes to Joe Dokes "financial planner" at Edward Jones or Charles Schwab or one of their ilk. Some kid who graduated from college 2 years ago and has a manager breathing over his/her neck to "sell variable annuities!" or "sell 527 college plans!" or whatever.

Seriously, would the average person even know to ask "Have you been performing worse than the index you track?"

[Cynical Guy]

40. No the average person should know to ask "What is the risk?"

"And what are you doing to reduce it?"

Every one of those graduates with finance degrees went through financial risk courses. Finance curricula include derivatives because it teaches you how to structure a portfolio of $50G or $50B in a manner that downside risk is removed at a cost of some of the upside potential.

I definitely feel the pain of those recent grads being told what they can sell. But again, I don't know if I'd be willing to have a 24 year old explain market risks to me.

I know quite a few recent finance grads, and they definitely walked into a crappy employment market.

[Hello_Kitty]

42. OMG. You really don't know.

The vast majority of middle class people are not getting advice from people with finance degrees. Not even close. Walk into your local insurance company branch (yes, many of those agents also have securities licenses) or "financial services" company. Ask the first "agent" or "registered rep" you see to explain derivatives to you. Are you goddamnfuckingkiddingme? They are far too busy smiling and dialing, trying desperately to acquire new clients, to learn whatever it is they are supposed to know about whatever it is they are trying to sell you. I think it's possible to extrapolate this to higher socio-economic levels, which is why we can now understand why Madoff's victims could be such saps.

[A HERETIC I AM]

43. How many people do you think are actually interested in what the Alpha or Beta of their portfolio..

is? Suggesting a person "should know to ask 'What is the risk'" is all well and good but the first time a financial advisor tries to explain the significance of Alpha, Beta, R-Squared, Standard Deviation and Sharpe Ratio to the average investor they are likely to be greeted with either a blank stare or eyes glazing over.

Most people are likely to think that sort of minutia is the job of the advisor and none of their concern, but nothing could be further from the truth.

I have an acquaintance who has been investing in Mutual Funds for over 50 years. He recently admitted to me he doesn't really understand what a Mutual Fund is or why exactly they are effective. He had no idea what the significant differences between a government bond fund, a balanced fund, a global equity fund and a target date fund were, why one might be more or less desirable to own, how they are structured, how much they paid in interest or dividends or how much they cost in fees. All of this information is readily available and legally required to be provided to him.

And the man was a Science Professor at a major Midwestern university for 30 years.

You might not be willing to have a 24 year old explain market risk to you but most people can't be bothered to listen to such an explanation regardless of who explains it. That is an unfortunately all too common fact amongst the American public.

[AllentownJake]

30. The problem is we should have never moved our retirement funding into the stock market

That was the dumbest fucking move this country ever allowed.

[CountAllVotes]

41. when did they begin to allow this ...

do you happen to know?

[Hannah Bell]

48. move from defined benefit pensions to 401k type vehicles was

approximateley 70's - 80's.

reagan is the watershed on most things.

[Jeff In Milwaukee]

34. Smacked Twice...

For being that aggressive in the first place (some stock holdings are good, even in retirement, but this appears excessive) and for counseling that you should write off these losses by switching to a money market when the market is at or near the bottom. My advice: Get a part-time job, leave your investments alone, and wait for the market to come back.

[Mme. Defarge]

59. My motto ...

NEVER trust a "financial advisor".

[many a good man]

11. Wait until the market bottoms out before you sell off

Just kidding. All your new contributions should go to the safest fund possible. Only sell out now if you think the market is never coming back. Otherwise hold on and hope for the best. Remember, the loss is all on paper until you sell.

[W_HAMILTON]

14. Hmm, tough situation.

Do you NEED the money soon? That is a ton of money to lose, and you are basically locking in the loss if you move that much out of the stock market. I don't know that I would place much faith in that financial advisor, though. If you NEED that money soon, and he didn't advise you to take it out of the stock market before -- or hell, even a few months ago when the stock market was still around 10-11k -- he's not worth a damn. You've probably lost about 50% of your savings. How much more do you think you can lose? How much lower can the market go? I say not much.

My mother is at retirement age, and I have advised her to leave the money in the stock market, since she can survive without it for a few years. I don't envision her losing much more money than she already has. She is in a situation like you; she should have gotten out already. But since you've probably lost all there is to lose, I would say stay in until you absolutely have to pull the money out. Hopefully that will be at least a few years from now, and by then we should be doing much better than we are right now. Maybe we'll be back at that 10-11k level.

[Fire1]

16. I have liquidated all assets until further notice.

[mdmc]

17. i went 90% t bills, 10% progressive stocks

I only lost a couple bucks so far... the t bills outdid my stock loses, almost..

[barb162]

19. I took my licks back in September and don't regret it.

I'm in cash instruments now. I agree with your broker except I'd probably do about 85% or more money funds, CDs, etc. I think the market will head down a good deal more yet.

[pansypoo53219]

22. almost time to buy stocks again.

buy low! if i had money i would be jumping in at 6800.

[NeedleCast]

23. Guy, I don't mean to be rude but WHY

would you leave that much of your 401k going into stocks and mutuals this close to retirement?!? your adviser should have had you moving into safer waters years ago and frankly, I wouldn't blame you a bit if you went to his office and gave him a punch in the neck.

[Mr. Hyde]

24. I'd fire my financial advisor for giving me that advice two years too late first and foremost

You're fucked now no matter what you do. Sorry.

[FloriTexan]

26. We moved our balances

to fixed funds earning 1-2.5% Which is damn good because we we lost 30% before we relocated the funds. We also stopped contributing to offset hubby's 15% pay cut. Maintaining, we're okay and lucky to be okay for now.

[GoesTo11]

27. I am stupider than most posters here, but

I would say it doesn't really matter how you got to having the amount in your accounts that you have now - that's water under the bridge. So if you've got, oh, 200k or so, figure out how that should be invested for a person of your age. In other words, basically, what's the right mix? As others have said, it should have been more conservative than you had it before, and it should probably still be more conservative than you had it before. But that doesn't mean it should all go into CD's - that's a play only if you are sure things will keep dropping, and none of us really knows.

My guess is you want to be something like 30% stock, 50% bond (including some TIPS), and 10% cash or something like that.

More important, you probably have to figure out how to live on a little less than you were planning or work a little longer than you were planning. Bad breaks, but it's just realistic. Figure out what you realistically need based on your expenses, your soc sec, etc.

The money market advice is silly. When would you get back in? When your advisor says to? The same advisor, presumably, who let you ride this crash out? (Like I did, which is why I am stupider than most posters here). Yes, things could still go down, no one knows - they could go way down, although I doubt it now that the grown ups are in charge. Over time, I think most experts expect them to basically settle out in the next year (possibly lower by 20% possibly higher) and then to go up at a reasonable rate. They're not likely to bounce back by 90% in a year or anything like that.

Good luck.

[marybourg]

35. You don't sound stupid to me, GoesTo. nt.

[Samantha]

36. I emptied out my 401(k) two years ago seeing the warning signs

(especially here at DU) of the impending crash. I took the money and finished off a basement apartment I had started four years ago (in anticipation of one day retiring and needing some extra funds). I finished that finally in August and rented it out. I get $580 a month for it. Once I install a washer/dryer upstairs, I can rent the entire level out for $1,000 a month. Rentals are big here in College Park, Maryland.

I am so grateful to have this rental income and think i did the right thing. I had lost all faith in US financial institutions.

My family was very critical of this move at that time. Works for me though.

Sam

[riverdale]

39. I am far stupider than most here

because I saw the financial crash coming from a mile away, but didn't know what to do about it. I took all my US stocks and moved to international funds- at least I knew the US economy was a house of cards - turns out it made no difference, the foreign stocks crashed just as much as Americans did. The correct move would have been to move to cash (or gold). Now I know.

[MISSDem]

37. I am still working full time and when I do retire I will have

a pension from my employer and, I assume, Social Security when I apply for it so I don't see me really NEEDing this 401K money for a while so I don't think it is as bad as it might sound. I really want to stay in the stock market to try and get back some of the losses but am scared.

[RagAss]

47. If they dont steal the pension !

[bottomtheweaver]

44. Let's work to make sure they don't break Social Security.

This is exactly why it was established.

[serrano2008]

45. I'd leave it in if I were you...the market's going to recover within 2 years.

You've only "lost" what is in there if you move it to something else or get out now. Realistically the market probably won't get much lower, true it could, but it WILL come back.

I've actually been buying a lot of stocks lately with any spare money I can come up with.

[whoneedstickets]

54. Agreed, we may not be at the bottom, but we're close..

...the market tends to be a leading, not lagging indicator. When everyone is finally convinced that we've bottomed out it will spring back. Moreover, the $ being pumped into the economy will drive up asset values. If you're in an interest generating investment you may lose more due to inflation.

[RagAss]

46. All my money is tied up in cash.

[specimenfred1984]

49. Your money, your decision, but the comments show how dumb people are

Most people are gambling with their retirements and don't even know it because they are so brainwashed by propaganda they can't even recognize pure speculation anymore. Some people think they are smarter than everyone else and can "pick the bottom" in the worst recession since the great depression, probably the same people that are smarter than Krugman, smarter than Obama, "smartest guys in the room", LOL!

Why'd you wait so long? You must be pretty darn comfortable.

[eridani]

50. According to Suze Orman, nobody over 60 should be in the stock market

Exceptions presumably are those who are well off enough to be able to afford losing everything they invest.

You should also consider an annuity--fixed, variable or immediate.

[notadmblnd]

51. I told my guy, that if he loses my money, we're moving in with him and his family

and he not going to like the old bat that comes with me.

No, seriously, I was just thinking about it tonight, I need to get in touch with him.

[McCamy Taylor]

52. I have never invested in the stock market. I do not believe in something I can not touch.

It seems like an invitation for con artists to go wild. If you have an eye for it, art is a safer choice. They haven't yet invented a way to bring artists back from the dead which is the only thing that would wreck that market. But don't do it if you can not spot a fake.

[Mme. Defarge]

60. I worked in the financial industry

for almost 10 years. Very glad to be out of it because after a long career in manufacturing, where people made things, I realized fairly early on that banking wasn't a good fit for me. One day a light bulb went on inside my head and I said to myself, "It's just accounting, just numbers. Electronic numbers. Numbers in cyberspace! A shiver went up my spine at the notion that it could all be gone in a puff of smoke. Plus, it was all about selling debt. Couldn't relate to it.

[SmileyRose]

53. Mine is tied up in the roof over our heads and next week's groceries.

[MISSDem]

55. I have lost "only" a quarter of my money in the 401K.

So listening to folks here that doesn't seem that bad. I think I will stay in. If I had been putting my bi-monthly amounts into a savings account I would not have any more than I have now so I really can't complain, when you get down to it.

[LeftHander]

56. Moved to stable asset fund in 2004...

After W won. I knew it meant certain disaster by the end of his term. So I got out right away after he was elected.

Now I borrowed my own money to buy a house for 30% discount and paying my self back 6% so this past year I gained around 7-8% when everyone in stocks lost 30-40%.

[Mme. Defarge]

58. Last June I read a dire prediction

by an economist with the Royal Bank of Scotland. Moved my 401(k)holdings at that time to an income fund and designated future contributions to go into equities. I am sorely tempted to roll over everything into equities now, but probably won't. I have always said that the stock market is worse than a crap shoot, where you know the odds.