The markets, my 401k, and why I’m not worried

I got an e-mail Wednesday that stated my 3rd quarter 401k statement was available on the Merrill Lynch web site. I typically don’t pay attention to the statements, as I monitor my account online, typically weekly. But lately, I haven’t been watching my account, for obvious reasons. I printed off the statement, as I was interested in how my investment selections were doing. Some were actually in the black for the quarter, but most were not. Since I’ve got about 20-25 years to go until retirement, I’m still investing fairly aggressively. Right now I have it spread out to about 80% in stocks, and the rest in bonds & cash. The company I work for pays their employer match to my account once a year, in the 3rd quarter. Also, they have a separate pension for their employees that is deposited in the same account at the same time.

I was interested to see how those two deposits, plus my own contribution, changed my account balance since the end of June. YIKES! The total of the employer match, the pension payment, and my contributions combined weren’t enough to make up for my account’s negative change in market value. And mind you, this all happened before the market REALLY tanked in October. I estimated for the quarter about a -12.3% loss. For the year, I’d guess I’m looking at something around a -20% loss. One of the dogs barking the loudest in my 401k is the Janus Adviser International “Growth” Fund. For the quarter, it dropped 24% and is -30% for the year. My lone salvation was the BlackRock Health Sciences Opportunities Fund that squeaked out the quarter with a 1.19% gain. Wooo hooo!

But am I worried about all this? No way! And if you’re, say, 50 or younger, you shouldn’t be either (Unless you plan to retire at 50 1/2). Even if we haven’t reached the bottom of this fall, it’s an excellent time to jump head first into the markets and BUY, BUY, BUY! I only wish I had more $$$ so I could obtain shares at good prices. Why? This ain’t lasting forever folks! The markets will rebound….they always have & always will. I was talking to my company’s 401k rep, Dan, about this today. Dan played football at IU in the early 1990’s and has that competitive attitude when it comes to the markets. He likes talking to me, because he knows I “get it”. Unfortunately for him lately, he’s been getting beat up pretty good by those in our company who don’t get it. I don’t claim to know as much about the markets as I’d really like to, but I surprise myself when talking to others who don’t. In these “tough economic times” as we’re told by the media, consumers are going to be looking for bargains. What bigger bargain barn is there than Wal*Mart? The stock market can be a crap shoot without doing your homework, and since I haven’t done my homework, I’d bet on Wal*Mart as a good place to put some money (Your results may vary). If you’re fairly inexperienced in investing, but don’t want to hire a broker, I buy my individual stocks through sharebuilder.com for just $4 per trade. I don’t put that much in…maybe $50 every now & then….and the stocks I’ve got on my “to buy” list are mainly those companies that I send money to (AT & T, Comcast, etc). As you may guess, I’m not doing homework on ’em! Since I don’t know what I’d ever use this stock fund for, that’s the reason I don’t funnel much money into it. It’s just for play, basically, and will likely serve as a rainy day fund.

So when the markets make their rebound, you’ll wish you would’ve invested NOW if you didn’t, and if you did invest now, you’ll be glad you did. And like the great Gordon Gecko said: “The most valuable commodity I know of is information.”

Consider what you just read for the past five minutes a share of that commodity.

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