Monday, January 3, 2011

Re-balance your 401(k) or IRA

I'm putting this on here because I need to do this for my IRA. I just recently consolidated my two 401(k)s from prior employers into one IRA at a day-trading company, and I need to do something with it rather than let it languish in a money market.

The way I re-distribute your funds is based on the following (with the obvious caveat that I've never made any money in the stock market): Wall Street doesn't look anything at all like Main Street. If mom and pop shops are hurting, that often means it's a good time to invest in the bastards who are reaping the rewards of their pain. Investors are rewarded for being assholes, and often--but not always--their funds perform well by preying on other's misery. This doesn't always apply, but that's a whole 'nother blog and one that makes my head explode.

Regardless, now is a good time to look at how you invest your retirement, because the way things are going, the baby boomers are dead set on making sure we pay for theirs, but don't get any of our own (c.f. Congress).

When I had a 401(k) I looked at it quarterly, and that seems to be about right. Any more frequent can cost you because some 401(k)s have fees for moving funds around. Any less frequent and you might be stuck with a long-term losing fund.

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