Ever heard of diversifying. You do not put all your eggs in one basket. My retirement fund was diversified when Enron went belly up. The fund lost 2%. However, it has gained an average of 7% a year since then.
Did you even read what I wrote? Enron was ONE company. Of course it wouldn't affect other sectors of the market. Obviously if you had investments in other sectors you wouldn't take a very hard hit. A portfolio genius like you should know this. Yes, diversifying is a wonderful thing and that's why 401ks and other investment plans usually have diverse portfolios. This was different because the housing sector is a large part of the economy. When it hit bottom it negatively affected other major sectors, some significantly because they provide a large amount of products and services to it.
Did you know that retirement funds have elections? In other words, as a member, you can vote to install a new member or vote to kick out an old one out.
Retirement funds DO NOT have elections. Companies have elections. But even then you have no say in who sits on the board. If, for instance, people have Alcoa as part of their portfolio, they will get the little prospectus in the mail and the opportunity to vote for board members. It's pretty meaningless, however, because people who own the company (that means they have most of the stock) will determine who is on the board. Even if a company that manages funds changes their Board of Directors, that really has nothing to do with the funds individual brokers manage.
Also, the board of the retirement system can change Funds. In many 401k's, you do have a choice of stocks and bonds. There is no guarantee that your money will grow.That is how a retirement system works for your information.
What the hell is the "board of retirement system"? Google it, I dare you. It doesn't exist. Like I said, did you even read my post? I actually was the one who was talking about how 401k's and the market work, that there are safer sectors and riskier sectors. And yes, most companies have some choices available but it's limited by what the company you work for is offering. Most of them use a particular investment firm (or firms) and you choose from among the ones they offer to for that particular plan. My husband's company uses Fidelity. They have a bazillion plans but we have a choice of about 30 of them.
i have investments in many areas but bonds is not one of them. Plus, I take issue with your statement that bond holders are average investors.
Again, you don't know what you're talking about. There are several bond funds available through our 401k and we have a couple for DIVERSIFICATION. Just to provide you with proof, try these links:
Best Funds for Your 401kThe 5 Best Funds for Your 401k20 Best Bond Only Mutual Funds This one was written in June and shows both the bond rating (every single one is an A+) and the risk grade (all but one are B or better).
These are not for the Trumps of the world but for regular people.
I have sympathy for those that lose their house due to job loss or sickness. Not so much for those that spend like crazy and piss it away on gambling, drinking and drugs. My friend was at fault and has to lie in his own bed.
Who the hell was talking about people who piss their money away other than you talking about your friend? And, as I recall, you were practically giddy about Trump's casinos going bankrupt specifically because your idiot friend developed a gambling addiction and is on the run from the mob or whatever. I think the people you should be thinking about, are those THROUGH NO FAULT OF THEIR OWN, lost their jobs because of Trump's bad business decisions.
The same applies to those that make bad investment mistakes. Teaching the value of money and how to save should be taught in schools.
Much like plumbers & electricians, people hire portfolio managers because they are experts in their field, thus maximizing the quality of their investments. Of the few people I know who make their own investment choices, they do a great deal of research before choosing a mutual or bond fund. I agree money management skills should be taught in schools but that sort of contradicts your point. On the one had you're saying people's bad investment choices are at fault and on the other that they aren't taught proper money management skills which would indicate they didn't learn how to make good choices.
People that are my age that still have a mortgage and credit card debt have been doing things wrong. Guess what..80% of people that are retired have little savings.
Someone who thinks one company going under has the same impact on the market as an entire sector of the economy, thinks retirement funds have elections, that there's a "board of retirement system" and that bond funds aren't for the average investor, is hardly in a position to judge choices other people make.
Whether a retired person has a mortgage is really none of your business and doesn't necessarily reflect badly on them. If they can afford the payments and don't mind having a mortgage, so what? My Nana, who died a month ago, had 2 credit cards. One she used for regular expenses, prescriptions, vet appointments for her precious little Sammy and the like, she paid off every month. The other, she used for bigger expenses, like hospital expenses that weren't paid by either Medicare or her supplement. She lived in California who probably has the shittiest Medicare supplements in the country (kinda like 0bamacare, only the available plans got worse after it was passed). Not only are the deductibles high, so are copays and there are limits to what they'll pay for during a hospital stay. Not once did she miss a payment and every single month she paid more than the monthly amount.
As for having a savings plan, there's no way in hell, I'm going to hold anyone in her generation accountable for not having one. She came of age during the Great Depression and Roosevelt's Social Security plan. People in her generation were told during their entire lives that SS WAS their retirement plan. To them, it was like investing in a 401k. Money was deducted from their paychecks so why wouldn't they think they were investing in their future? Obviously, you're a very special snowflake since you know more than many seniors of "the Greatest Generation". Yes, many companies began offering retirement plans while they were still working but my grandparents were part of "the working poor" and my grandfather didn't have the kind of jobs that provided such luxuries. They saw their purpose as working to provide a better life for their sons.
She (and many women like her) lived during a time when women simply did not make financial decisions for the family. She also stopped going to school when she was about 14. She lived on a farm with 10 brothers and sisters and was needed at home. It was more important that her brothers graduated so the girls had to help with farm chores. She went from her house to my grandfather's house and her job was keeping house and raising 3 boys. She never even learned to drive. The first time she ever had any independence was when my Pa died. It was a steep learning curve for her but, in spite of her ONE credit card with an unpaid balance, she saved enough money (with the help of a small life insurance policy) to pay off her ONE debt and pay for her cremation. Don't judge others until you've been in their shoes. You don't seem to have an ounce of compassion for anyone but yourself.
Cindie
