401k advice

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I saw some questions about 401k planning so I'll give you some advice. If you think the stock market is going to crash (Ed thinks so) then you don't want your 401k tied to the stock market. You can move your money into bonds, money market, or precious metals, anything that isn't tied to the stock market. If nothing happens, you can move your money back into the stock market in a few years. Or you can move it back in when it hits its low, and buy twice as many stocks as you own now. Remember, buy low sell high. You haven't got that much to lose with this advice.

-- Amy Leone (aleone@amp.com), July 23, 1998


Doesn't the bond market fluctuate with interest rates as well as money markets? Will money be harder to get? If the stock market crashes, I forsee money being invested in companies trying to fix the problem, but then again if people lose their money, they will be so disenchanted with the stock market, as they were during the depression, that a recovery will take years. We have money (401K) in the bond market, diversify the experts say. I think money will be tight, people will be unemployed, soup lines, etc. But, don't forget, it will be election year, that is unless Clinton cancels it! Then what would happen to the stock market? How about this scenario, Clinton resigns or is impeached, Gore steps in as pres, and Gore cancels the elections.....hmmmmmmmmmmmmmmmmm!

-- Barb-Douglas (bardou@yahoo.com), July 23, 1998.

I think the way it works is that when the stock market is doing bad, bonds are doing good. I don't remember the reasons. The basic idea is to get out of the stock market because these companies are going to be falling like dominoes.

-- Amy Leone (aleone@amp.com), July 23, 1998.

Stock market was down 190+ points today. Japan not doing so hot today, I wonder if this is the sign, I read somewhere, when it starts to roller coaster, that's when you get really ready to get out. Japan is highly invested in the bond market as well as other Asian countries. I hear that they can only make 2% interest on their money in their country, that's why they put it into our bond markets so they can make more. Billions of dollars are flowing in........we shall see.

-- Barb-Douglas (bardou@yahoo.com), July 23, 1998.

The United States is still far and away the strongest economy in the world - the Euro will give it a run and if the oil-producing countries tie their oil price to the euro as desired, the U.S. is in for a rough ride....But where else are deflating countries going to put their investment money, except America??

-- Laurane (familyties@rttinc.com), July 24, 1998.

It appears the stock market could crash at any time. If one moves out of stocks and mutual funds within a 401k or IRA into a money market, where else is there to go? other than cashing out and taking the 10% penalty plus paying taxes. I guess this is a question in response to your statement.

-- David Bennholt (davidbenn@aol.com), July 25, 1998.

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