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Subject:  401k for 22 year old Date:  3/20/2003  4:22 PM
Author:  EsamMoney Number:  35929 of 90802

Ok so I'm 22 years old and I met with the investment guy for my company's 401k plan (ING). I told him I was going to put 15% into our guaranteed fixed rated account. This account is GUARANTEED minimum 4.65% return and is currently at 4.95%. This money is not taxed because its in my 401k. He practically begged me not to do this because my time horizon is so long(45ish years) and said I should be 100% invested in stocks. I personally feel the 85% invested in stocks that I would have been is still quite a lot of stock exposure. Basically I want to put that money in the fixed account as an alternative to bonds because I highly doubt I will see a return of 5% on bond funds in the coming years. When interest rates go up and bonds look attractive I can take my money out of the fixed account and put it into the bond fund. I don't see any problem with guaranteeing at least a small portion of my portfolio, even if it does limit my upside potential a bit. I mean I am contributing my 15% to my 401k plus my employer's 1% match(what a stingy match!). What do you think? Whew!

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