Tuesday, October 14, 2008

401K equal Zero

With Wall Street in turmoil and the Stock Market doing it's best Kamakazi impersonation I had no desire to look at my 401K plan. This is the first job where I actually make enough to put money in and not have to eat Ramaen Noodles for a month. I heard the horror stories from the others in the newsroom and knew that at times it was at a 26% loss and I had to be around that number.

Then today I get an email from Fidelity with this message in giant letters:

Thoughts on investing in a volatile marketplace.

Holy crap, this can't be good? They are telling me not to panic, but I am panicking! Oh crap oh crap oh crap! I asked around if this was bad, and The Serg said I should not look at my portfolio. Of course what do I do, I log on and find out I've lost 36.5% of my portfolio.

To put this in to prospective; I've lost everything I have put into my 401K in the past year plus $300. I'm not as bad off as some of the people in the station, but how am I going to make this back? I did a little bit of changing, like drop all of my company stock (hasn't made money since I've been here) and took some of the riskier investments and put into simple bonds that will make money. I know I am young and can be and need to be a little risky, but I can't ever have this happen again. To loss a years worth of work when I could have used that money to... I don't know pay off credit cards or make a house payment.


King Tom said...

Everything you wrote sounds very familiar- our retirement stuff took a dive too. The two good things are that everything is relatively cheap now and we have a way to go before retirement.

The one piece of advice I'd pass along (and I'm not a financial advisor, but I've heard this everywhere) is invest in different things. Don't have all your eggs in one basket (especially the company you work for, no matter how big a discount they give you). That's how the employees of Enron got screwed.

The Original Dave said...

I stopped putting my own money into my 401(k) at the beginning of this year so I could have some extra cash while I try to get out of debt. The Company still puts in 3% of my earnings in no matter what, so I've still been contributing.

I checked mine last night and I only lost $2,000, or about 7%. Of course, 40% of my funding goes to a Stable Fund of some sort.

I suppose when the market gets back to it's less volatile days I should switch it to something a little more aggressive, but right now I'm glad I had it where it was. I still have a long time until retirement, so I'm not really all that concerned at the moment.

You really shouldn't panic just yet. The market will correct itself and then move on, as it always has. It may take a few years to get back your retirement fund back to where it was, but I imagine you'll be just fine in 20+ years when you do retire.