401(k) in a heap of trouble? You must diversify

The Ticker

November 21, 2001|By JULIUS WESTHEIMER

IF YOUR plans for an early and comfortable retirement were dashed - and your 401(k) turned into a 201(k) - you may be in a panic," says Forbes. "But there are things that 50- and 60-ish folks can do to salvage their futures."

The article suggests: "Get rich slowly. Expect lower annual returns than the 15 percent we received recently.

"Thwart inflation. Too many bonds leave you vulnerable to inflation. Diversifying your asset sectors is a must.

"Dodge taxes legally. Think about your family's assets as pieces of an integrated portfolio, even if they're in different baskets. What's in your 401(k) affects what's in your spouse's 401(k) and other holdings."

IT'S MUTUAL: "Mutual fund investors trade too much," says The Journal of Financial Planning. "It's not the lack of accurate information that hurts them, but their inability to apply the mountain of data available. For help, try a good financial adviser."

TAKE YOUR CHOICE: "To be ready for the new bull market, let go of the past completely. Get out of the relationship with an adviser who still believes in `buy and hold,' and doesn't have a sell discipline." (Maverick Investor, in Barron's)

"Buy a stock the way you would buy a house. Understand and like it so much that you'd be content to own it for years in the absence of any market." (Warren Buffett)

WALL STREET WATCH: "How long will this rally last? In spite of institutional nervousness causing more `down' than `up' days, this rally will run into early next year." (Principles of The Stock Market)

"If this rally continues, we would `sell short' heavily near S&P index level of 1130." (H.D. Brous & Co. Crosscurrents)

"This is an excellent time to add to your long-term holdings." (S&P Outlook)

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