401k advice

[BzyBee DH]

wow thanks for all of the wealth of information! It gives me a lot to consider and think about.
MaryMary and bzybee Dh why do you think bonds are so bad, or out of the question?

Bonds are not bad. At this point, I have ruled them out for me. I would rather have more growth potential - which also means that I risk it going down more each year. I am ok with this more "adventurous" ride.

I am not interested in bonds. Look at the link from the prior thread - it reflects the history of bonds vs stocks.

Basically bonds are less risky, and also less reward. The risk with stocks - being more up & down, etc - is mitigated with a longer time to retire.

As some people get closer to retirement, they want to have less risk in their profile - (less up and down). Therefore, choose more bonds as a percent.

Pensions are generally invested by institutions with 40% bonds.

[MaryMary]

Bonds are not bad, it reduces the risk but they significantly cut performance of your accounts, as BzyBee DH said above. you have at least another 35 years to go, time is on your side, you need performance more then safety now.
As your 50's will drew closer make room for bonds in your retirement accounts to preserve what's already there. increase bonds share slowly and gradually, it doesn't have to be all bonds even if you are already started mandatory withdrawals.

[MaryMary]

Some useful reading for OP.

Outwitting-the-Bear: Personal Finance News from Yahoo! Finance

they outlined few strategies. beware, some of them are not for everybody.

[matipid]

Since, investing in the 401K, I have only lost money. Not blaming anyone as I believe that the 401K as structured is deficient. It is deficient when all investment choices outside of bonds is in stock mutual funds. The problem with mutual funds is you cannot get out without sustaining a loss. Once, you switch to a money market or bond mutual fund, you have sustained actual losses. If you stay in, you risk more and larger losses and you can only hope it goes back up! In the last downtrend, I lost $7,000 but, got out regardless. I switched to a broker account in my 401K (not all 401K plans allow this but, if it does---do take advantage of this.). Why is this better you might ask? It is because: 1) I choose the stocks to invest in, 2) I can protect that same stock by buying those stocks with options. A stock and put option combo which will minimize losses if any while, allowing you to realize substantial gains. Say you buy Walmart, 100 shares at $50.00 per share. That is $5,000.00 plus buy a put option for $5.00 or $500.00. Total cost of the stock position is $5,500.00 or $55.00 a share. Any price above $55.00 will make you money. If the stock tanks and goes down say to $40.00 you still get to sell it for $50.00 due to the put option (insurance). So, total loss in worst case scenario is $500.00 plus the cost of commission. The upside is much, much larger. Say Walmart goes to $100.00, you now make $45.00 per share profit x 100 shares is $4,500.00 total profit. This is one way to invest and protect your position as well. Much, much better than the current mutual fund set up for most 401K's.