401k/retirement losses
I am 61 would like to retire next year and have a 401k vanguard through my employer…I just lost 40k from January to march….would like to not lose any more…my investment mix is 60% stocks & 40% bonds as of now…where should I move the funds to prevent future lost…
Terry Says
Please read my recent column. The stock market is volatile; you know that! The way to minimize losses is to choose the most conservative funds in your plan, such as an equity/income fund.
But BONDS ARE AS RISKY AS STOCKS!!
When interest rates rise, ALL bond prices fall — but longer term bonds show bigger losses.
It’s not that the company may default. It’s that if people have cash they will get a higher-yielding bond, so no one will pay $1,000 for your old long-term bond that carries a lower interest rate. They will pay you less in order to get an equivalent price.
WHEN INTEREST RATES RISE, BOND PRICES FALL!!
You are set up to lose both ways!!! Is there a money market alternative or a stable value fund in your 40l(k) plan? If so, move some money into it!!
