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Diversify and hedge. Name of the game. People I work with have seen their 401K's eviscerated. Mine is more or less OK, because it is "heavily weighted" into mon

by Allocator2008 18y ago

Diversify and hedge. Name of the game. People I work with have seen their 401K's eviscerated. Mine is more or less OK, because it is "heavily weighted" into money markets, which are safer than equity markets. The "rule of thumb" for people in their 20's and 30's is to have 70% of the 401K in equity markets. I didn't follow that, and instead reduced my position in equities and increased my position in money markets, when it came to my own 401K. Now I am more or less OK while my collegues are scrambling to sell.

johnrob 18y ago
You're never going to get a good interest rate in money markets. Sure, safe havens are looking good over the past 12 months - but the stock market is going to kill them in the long run. Some people try to time the market, shifting their assets between safe and risky. However, doing this involves both the labor of research and the risk of being wrong. You're probably best off in the long term if you just stay with the market. Unless you want to spend all of your time doing financial research, in which case you can probably increase your std deviation (but not your expected return).
- mynameishere 18y ago
  Timing the market isn't that hard sometimes. Look for the hockey stick and avoid it. Say what you will about money market funds, but when you actually see the widespread bloodbath going on, http://vanguard.com/us/FundsByName http://vanguard.com/us/FundsByName ...that +2.0 percent return is pretty sweet next to 75 different funds' 20 percent losses. Cuban himself evidentally recommends CDs...
  - antiismist 18y ago
    He doesn't recommend CDs for 401(k)s though. He recommends it because he believes it is important to have quick access to cash in order to take advantage of opportunities.
LPTS 18y ago
401K? To get rich. Fuck that shit. How about: "Never work at a job with a 401K!" as a rule for how to get rich. Since your alternatives will then be to be poor and miserable or get really rich, you will be more motivated. Personally, I'd shoot myself in my head if I ever caught myself thinking about protecting my 401K between money markets and equity markets. Figure out something meaningful. Name of my game. Hoarding biosurvival tickets earned working like some chipmunk trying to survive an endless winter that will inevitably kill them, so that you can enjoy the fleeting illusions of stability and more prosperity than your neighbor before your body turns to the same worm food theirs does seems a really shitty way to respond to finding yourself alive on this planet with a good mind and a brief window of autonomy where you might do something really meaningful.
- Allocator2008 18y ago
  Dear LPTS: Thank you for your candor. With views like that, it works out better for pellet-hording "rats"/"chipmunks" like myself since once you exit stage left via the whiskey/suicide route, that means there will be more "pellets" for us "rats" by way of your no longer using up the social security benefits! :-) Cheers!
- nihilocrat 18y ago
  I pretty much agree with your core idea here; "not having a 401k forces you to take care of your own retirement savings". However, it seems like you think that saving for retirement is completely stupid. I don't mean to insult, but it sounds like when you feel like you can't make money anymore, you're going to down a bottle of whiskey and blow your brains out. Financially, that's actually probably the better idea, since you don't have to worry about having money for a zero-productivity endgame. The downside is you miss out on a lot of non-money advantages of retirement (grandkids, if you go that route, and various other things retired folks say they enjoy). Just think of retirement funds this way; people are making sure they don't have to eat cat food bought with social security checks during the waning portion of their "brief window of autonomy", and they don't want to go for the aforementioned whiskey-and-suicide route because most people don't actually want to kill themselves.
  - 18y ago

johnrob 18y ago

You're never going to get a good interest rate in money markets. Sure, safe havens are looking good over the past 12 months - but the stock market is going to kill them in the long run. Some people try to time the market, shifting their assets between safe and risky. However, doing this involves both the labor of research and the risk of being wrong. You're probably best off in the long term if you just stay with the market. Unless you want to spend all of your time doing financial research, in which case you can probably increase your std deviation (but not your expected return).

mynameishere 18y ago
Timing the market isn't that hard sometimes. Look for the hockey stick and avoid it. Say what you will about money market funds, but when you actually see the widespread bloodbath going on, http://vanguard.com/us/FundsByName http://vanguard.com/us/FundsByName ...that +2.0 percent return is pretty sweet next to 75 different funds' 20 percent losses. Cuban himself evidentally recommends CDs...
- antiismist 18y ago
  He doesn't recommend CDs for 401(k)s though. He recommends it because he believes it is important to have quick access to cash in order to take advantage of opportunities.

LPTS 18y ago

401K? To get rich. Fuck that shit. How about: "Never work at a job with a 401K!" as a rule for how to get rich. Since your alternatives will then be to be poor and miserable or get really rich, you will be more motivated. Personally, I'd shoot myself in my head if I ever caught myself thinking about protecting my 401K between money markets and equity markets. Figure out something meaningful. Name of my game. Hoarding biosurvival tickets earned working like some chipmunk trying to survive an endless winter that will inevitably kill them, so that you can enjoy the fleeting illusions of stability and more prosperity than your neighbor before your body turns to the same worm food theirs does seems a really shitty way to respond to finding yourself alive on this planet with a good mind and a brief window of autonomy where you might do something really meaningful.

Allocator2008 18y ago
Dear LPTS: Thank you for your candor. With views like that, it works out better for pellet-hording "rats"/"chipmunks" like myself since once you exit stage left via the whiskey/suicide route, that means there will be more "pellets" for us "rats" by way of your no longer using up the social security benefits! :-) Cheers!
nihilocrat 18y ago
I pretty much agree with your core idea here; "not having a 401k forces you to take care of your own retirement savings". However, it seems like you think that saving for retirement is completely stupid. I don't mean to insult, but it sounds like when you feel like you can't make money anymore, you're going to down a bottle of whiskey and blow your brains out. Financially, that's actually probably the better idea, since you don't have to worry about having money for a zero-productivity endgame. The downside is you miss out on a lot of non-money advantages of retirement (grandkids, if you go that route, and various other things retired folks say they enjoy). Just think of retirement funds this way; people are making sure they don't have to eat cat food bought with social security checks during the waning portion of their "brief window of autonomy", and they don't want to go for the aforementioned whiskey-and-suicide route because most people don't actually want to kill themselves.
- 18y ago