I Just Woke Up From A Fuzzy Dream

I’ve bashed company managed 401Ks in the past. Now it feels like I’m kicking a corpse. Let me get one final punch in.

Today I received the year end statement for my company 401K. When I say “my company”, I mean the one I worked for from January 2002 – May 2006 and again from September 2007 – April 2008. Both times I left the company, I had the balance of my 401K moved to a self directed account with Ameritrade.

Smart move.

I know people who can’t be bothered with managing their retirement money. They set the contributions and then hope everything works out. I didn’t believe the market was honest and exited before the crash.

Here were the 2008 returns for the 4 diversified funds offered by my company.

  • -16.79% Conservative
  • -26.14% Moderate
  • -34.54% Growth
  • -40.61% Aggressive

When I look back at the 3 year returns, all these funds are still negative. In fact, none of these funds beat the FIXED INCOME FUND over a 1, 3, 5 or even 10 year time span. But fixed income is so boring, who would ever advise something that boring?

Published by

MAS

Critical MAS is the blog for Michael Allen Smith of Seattle, Washington. My interests include traditional food, fitness, economics, and web development.

One thought on “I Just Woke Up From A Fuzzy Dream”

  1. You must admit -40.61% IS very aggressive! 🙂

    My wife had one of these plans at her last company. They wouldn’t allow straight cash, so we put her money in a 100% treasury fund. The primary goal was avoiding income taxes on the money …then transfer it to a self directed fund later.

    Her other options were 7 stock funds and 2 bond funds (both of which had exposure to mortgage backed securities). What a joke!

Comments are closed.