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Author: 060255 Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 76237  
Subject: What now!! Date: 3/23/2001 11:38 AM
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In one year's time I have lost approx. $20k in my 401k.
From $45k to $28k). I have invested in Fidelity Mid Cap, MFS Investor Growth Fund (large cap) and AIM Aggressive Growth Small cap fund (the first hit I took I had a Janus World wide fund). These are all aggressive growth fund. I'm thinking I've held on too long because I saw the past history of good performance. It has been said that when the stock mkt turns back good again that these funds will rebound the quickest and make up for the lost ground before the other funds do. Do I hold on to these and hope the market rebounds and allow them to make up the diff. or do I get out of them and cut my cords and go with bonds, money market funds (conservative & safe) and wait this out in a safe environment. If I sit with bonds- then I will miss any big recovery. The same may be true with index funds that are loosing money as well. I'm 45 so I have 20 years until retirement. What do I do next?
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Author: BrunoIsMyName One star, 50 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 28599 of 76237
Subject: Re: What now!! Date: 3/23/2001 12:01 PM
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Lock in your losses now and put the money in a money market fund. At 5%, you can guarantee yourself a full recovery in about 10 years.

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Author: Ringfinger Big gold star, 5000 posts 10+ Year Anniversary! Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 28602 of 76237
Subject: Re: What now!! Date: 3/23/2001 12:52 PM
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That is one strategy, another is since you have 20years, let it ride. The market will make up for the losses, you just have to give it time.

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Author: PMcMullenCT Three stars, 500 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 28603 of 76237
Subject: Re: What now!! Date: 3/23/2001 1:19 PM
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In one year's time I have lost approx. $20k in my 401k. ....These are all aggressive growth fund. I'm thinking I've held on too long because I saw the past history of good performance. It has been said that when the stock mkt turns back good again that these funds will rebound the quickest and make up for the lost ground before the other funds do. Do I hold on to these and hope the market rebounds and allow them to make up the diff. or do I get out of them and cut my cords and go with bonds, money market funds (conservative & safe) and wait this out in a safe environment. If I sit with bonds- then I will miss any big recovery.

It would probably be wise to stop thinking in terms of your investments rebounding to where they may have been last June. You never really had $45K, it's only paper until you sell, and you didn't. A tech buying frenzy pushed many stock prices far beyond where they ever should have been, without regard for profits. The correction has largely brought these stocks back to the rest of the market.

Just because a stock was trading at $100 a share and has now dropped to $20, doesn't mean that a "recovery" will send it's price back to $100. Start thinking in terms of the long term rates of return of various asset classes. A $20 stock may very well return about 11% per year going forward, without regard for the fact that someone once paid $100 for it. Just because tech stocks have fallen the furthest, doesn't mean they'll gain the most on a rebound.

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Author: tfranklin Two stars, 250 posts Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 28608 of 76237
Subject: Re: What now!! Date: 3/23/2001 3:30 PM
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In one year's time I have lost approx. $20k in my 401k. ....

The value of the mutual funds in my 401k have also depreciated by about $30K in the last nine months. Please note that I don't claim to have lost it.

I'm still contributing money to those funds, therefore I am buying more of the same funds for lower prices.

IMO, we are near the bottom of the market, -- no predictions though. The real question is when will the market begin an upward trend again. It may have began today, but not likely. It more than likely will take three to nine months for market to start seeing some gains.

I am holding the funds I have, when the market turns up again, I will evaluate them to see if I still feel comfortable holding those funds and switch then.

I vote for holding on because the time to get out was 9 to 12 months ago. Now is the time to get in.

Be patient.
Tony

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Author: dannari Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 28619 of 76237
Subject: Re: What now!! Date: 3/23/2001 11:00 PM
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Hang in there. You've got time on your side. Also, stocks are a bargin. Right now, your 401k has a paper loss. If you make a move, you will turn your paper loss into a real loss. For example selling your growth stock fund and putting it into a bond fund or money market now is absolutely the wrong thing to do. Remember you aren't investing for someone 60 or 70 years old.

Because you are in a 401k and you dollar cost average your's and your company's match periodically into the fund or funds in the 401k, it is to your advantage if the per share price drops even lower. This brings your buy in price lower and you accumulate more shares. Increase your contributions if you aren't maxed out. The only thing that matters is that when you retire in 25 or 30 years, the price is higher. Have faith it will be. Because this is a bear market now, the 401k per share price will be higher.

Keep your head don't panic.

Dan

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Author: rkmacdonald Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 28620 of 76237
Subject: Re: What now!! Date: 3/24/2001 10:14 AM
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Author: 060255 Date: 3/23/01 11:38 AM Number: 28595
In one year's time I have lost approx. $20k in my 401k....I'm 45 so I have 20 years until retirement. What do I do next?

You've got plenty of time for the recovery that, inevitably, will come. I would maximize my contributions and buy as many shares as possible while the market is down.

Russ

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