What is the best way to invest your 401k money in this economy?
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M$7 Answers
If you are young and have at least 10-20 years until you retire, you should be comfortable taking on a little more risk with a diversified stock/bond portfolio. That's because this type of portfolio has performed well over time historically. It may suffer a few down years, but in the long run it has worked really well.
However, if you are less than 10 years from retirement or just unwilling to take on the risk of investing in stocks or stock mutual funds (that covers a lot of people after the horrible market performance in the past year), you should probably increase the amount of money you put into bonds and cash.
"Cash" could mean a stable value fund, a money market fund, or TIPS (which are relatively safe government bond investments that aim to beat inflation).
For suggested investment mixes and more info on retirement investing, check out the retirement category of Simple Rules of Money:
http://www.simplerulesofmoney.com/index.php?option=com_mojo&Itemid=36&cat=20
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M$I would highly recommend investing your money mutual funds. Diversify, diversify, diversify right? It's not risk free (nothing with the stock market is...) but by diversifying, you spread the risk around. Mutual Funds allow you to put a small amount of money in to a pot with lots of other people- then the company that owns the mutual fund, decides what type of companies to invest in, and more specifically, what companies to invest in. Different investment companies will have different percents of a mutual company going to a different area. Does that make sense? So you can buy into a mutual fund that covers only metals if you'd like, or you can buy into a mutual fund that covers a broader range of things like technology, metals, renewable energy, etc.
If you want your money to be entirely risk free, I'd recommend bankrate.com to compare interest rates from varies banks around the US. Contrary to popular belief, you can get into a CD that has a decent interest rate...
Off topic, but I would also recommend checkingfinder.com for high yield checking accounts (added bonus, it's endorsed by Dave Ramsey.)
I'm a financial nerd... on my way to becoming a financial adviser.
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M$
Gold may be good because of the impending inflation due to the massive debt in the economy, but I think that ship has sailed. The price is too high now.
Don't attempt to time the market by waiting for things to look better. No one can time the market. History says it'll come back. History may be wrong, but we must do our best with what we know and be content if the outcome is not as good as we hoped. Putting a little in each month has not failed over a long period of time yet.
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M$
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M$
At this time, investing money is not the best thing you should be doing. If you are thinking about shares - be careful. I recommend that you wait, for economies around the world are continuing to get lower. Unless you are pretty sure you will make a profit in a certain company, I recommend you wait.
cjd
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No one knows what the stock market will do. What if the stock market has already hit it's low? What if it's going back up? You could invest a little bit now, and in a month invest a little bit more. If the prices continue to go down, then you can buy more shares with the same amount of money. If prices go up, then the shares you bought now will be worth more.
I do agree- unless it's money that you don't need for retirement it is best to be careful. Research stocks, companies, mutual funds, banks etc. before investing.
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M$
Gold doesn't deflate or inflate the way the dollar does because we have basically found all the gold there is to find. The same ounce of gold will buy the same suit that it did in the 1900 as it would in the year 2000. Invest in gold only if you are want to sit on the side lines and keep up with inflation. It's basically the same as buying a product now instead of paying 3% more on it the following year. (Three percent being inflation.) Really you can find checking accounts that give you a better rate of return.
I like what you said about not panicking. I recently read an article (sorry I can't remember where...) about the richest people in America. It said that the richest people in America had only one thing in common- they don't let their emotions get the best of them when it comes to investment. That doesn't mean you shouldn't listen to your emotions, just that you should find more information about that specific product before going with your gut.
http://www.investopedia.com/articles/basics/08/invest-in-gold.asp
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M$
Wow, I read a very interesting book about this concept (Mac Investment), this concerns the rel="nofollow" href="http://www.bankonyourself.com/pamela-yellen">http://www.bankonyourself.com/pamela-yellenbest way to invest money/url. Very interesting!!!
