aceventura3

I never heard of a 401(k) plan that did not offer fixed investment options or a simple money market choice. The botom line is that the closer a person is to retirement the more conservative they need to be, this advise is every where. If you ignore it you do it at your own risk.

Those who have the benefit of time, will do o.k.. First, there has never been a rolling 10 year period where the market lost money. Second, those making contributions are lowering their cost basis in today's market, its like being able to buy and stock (pardon the pun) up when things are on sale.

For example if you invest $1,000 per month and the prices for a fund are like:

Jan- $100
Feb - $150
Mar-$200
APR -$250
etc.
etc.
Dec - $650

at the end of the year you have 43.6 shares at a cost basis of $275.21 per share.

If the pattern was:

Jan - 100
Feb - 50
Mar - 25
APR - 250
etc.
etc.
Dec - 650

at the end of the year you have 91.94 shares at a cost basis of $130.53.

I know this is simplistic but if you go back historically using the S&P 500 (Spiders, symbol SPY) you can plug in some very realistic historic results. Bottom line is consistent investors with time have an advantage and prefer periodic corrections.


P.S. - Don't make fun of me, I like numbers. I already know I am weird, etc,etc,etc.

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