Frequently asked questions
What happens if the funds available to me in my 401K plan
are not those in your model portfolios?
You can usually get similar funds in most plans. If you are
unsure of what funds to use utilize low expense ratio index funds. If I get
requests I will review funds from time to time.
My plan will not let me trade but every 90 days. Can I
follow your plan?
I recommend when we sell to take money out of a fund where
the money has been there for at least 90 days. I do not recommend trading
often.
Can you guarantee I will do better in my 401K or IRA?
Investments have no guarantees. I have done well in the past
few years but that does not mean I will do well over the next few years.
Where can I put my money to obtain the dream portfolio?
The dream portfolio is available from Fidelity and Vanguard.
If you have a 401K from Fidelity makes it easy to open an IRA through them. In
some plans your employer allows you to roll money out of your 401K directly to
an IRA. The company I work for allows you to roll over the portion of the money
they have contributed but not my contributions. In this case it makes good
sense to roll the money over to improve diversification.
I am a GM employee. How much GM stock should have in my
401K? Is GM stock a good investment?
GM stock may be a good investment but for you a GM
employee I would not have over a 10% in company stock. Presently you get your
salary, your healthcare and other benefits such as retirement with the company.
To add your 401K to the mix is excessive.
You did predict thee drop in the market last summer (July
2007) but you kept all of your money in the market through this latest market
drop. Why?
I am not magic. I believe in that buy and hold investing is
sound advice. When I see the market is very likely to drop significantly I
remove money from it. When it does I just put it back in. I did not see a lot
of indications the market would drop this far or this fast since October 2007.
If hindsight were 20/20 I would have pulled every dime out of the market around
the end of October and put it back in February 2008.
When will the market come back?
The market may or may not have bottomed right now but I
believe two to three years from now you will be glad you invested money right
now. To answer your question I will guess the market will not begin to recover
until April however, even if I am correct I’m not waiting to invest my money.
The market is at a multi month low (February 2008) and now is a good time to
buy.
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