Why 401K Plans Are Bad
Why 401k Plans Are Bad
Half Sigma
posted November 20, 2003
Advice for 401k investors
If you have a 401k plan, and it’s invested in stock market funds, especially stock market funds that have a strong emphasis on tech stocks (and if you don’t know what kind of stocks your mutual funds are invested in then maybe you shouldn’t be invested in stock market funds), then my advice is GET OUT. I repeat. GET OUT OF STOCKS. Put all of your 401k money into the safe money market fund (which hopefully every plan has at least one of) and wait.
The bottom of a bear market comes when everyone thinks that stocks are a bad investment. We are obviously far away from the bottom because everyone is still investing in stocks.
100% of my own 401k money is invested in a money market fund. I have plenty of non-401k money invested in stocks of my own picking, but I have no use for any of the stock funds that my employer has offered me. Unfortunately, I’m not lucky enough to have an employer who offers a self-directed 401k plan where I can pick my own stocks. So my 401k money is invested in the safe money market fund, which will maintain its value when the echo-bubble finally bursts.
Votes:28
Comments: 0