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For those who practice asset allocation and have a certain percentage of their portfolio in fixed income investments a 401k loan makes perfect sense. I allocate 20% of my 401k to fixed income rather than equity. I include my 401k loan as part of my fixed income investments. In my case the interest I am making on the loan is even better than what I can get from the available fixed income options in my company plan. This sounds like a very Foolish strategy to me but no one has mentioned this before. So am I missing something here?
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