401K Bonehead Investment Move
I have about $20,000 in my 401K right now. 10K is in company stock, and 10K is in options of my choice. I'll get to the company stock later, but first... with respect to the money that I can shift between plans, at some point (I dimly remember doing this) I was getting more and more aggressive, and finally everything ended up in real estate. Yep. I know. That's the opposite of diversification. And, of course, real estate is doing really bad right now. My thought, when I was thinking, was that real estate might get bumpy for a bit, but eventually it would rise again. In retrospect (it's always in retrospect, isn't it?) it seems really dumb to ride the fund to the ground, only to see it rebound in a few years. I've already lost 11% THIS YEAR. Do I hold and wait for it to recover, or do I shift it? Any advice?
With respect to the company stock. My company was bought last year and all my stock automatically vested because of the merger. That means I can move it around, but the price of the stock, again, is way down. I just got the ability to diversify, but the stock is down from around $20 when we got it to $16. The stocks high was $45, and we're gaining share slowly back. People think it should recover in about three years. Not sure what I should do with all this. Any advice?
3 comments:
Hey there...Caught your request over at iwillteachyoutoberich...
IF you have future 401k investments going in, I would suggest starting from there, with future funds, to begin the process of diversification.
Having 50% in company stock is far to high, but it doesn't mean you should sell all of it and that goes for the other 50% wrapped up in a REIT. How much wiggle room do you have with selling company stock? Do you have free reign to sell $8000 from the REIT at any time? Are there any restrictions in your plan? What are the minimums for your selection of funds? What are some of your funds you can chose?
Let me know and lets see if there isn't something that can be done.
I would think you could slowly begin the process of picking funds for future monies as well as over time, liquidating your company stock and REIT positions down to 10% a piece.
Let me know a tad more.
I'm with Luke: at minimum, redirect your future investments into something else. Depending on how much you're putting in (and how much the other funds go down... sorry), you may be fairly well diversified in another year or so.
It's really hard to pull the trigger on changing investment mixes, as I well know. good luck!
thanks guys--i'm doing my best to follow your advice. i reference your comments in my newest post.
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