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[oagboghi2]

Ok. I really have no reason to make up a story about this. But I'm not a financial advisor, and I really gain nothing by trying to prove it, so..

Sounds like your friends didn't tell you the truth

 

[godhandiscen]

There is no such thing as 'losing everything' in mutual funds, and no financial advisor would ever suggest cashing out... For them to lose 50k in 2008, they would have needed a minimum of 300k invested even with the worst 401k eligible mutual fund at the time,, And the penalty of withdrawal would have doubled the losses.

this story doesn't add up at all.

What do you mean? There are mutual funds that track different industries., and depending on which broker has your 401k, these funds are available to you.

The whole point of the 2008 crisis is that people created obfuscated investment vehicles (mutual funds for example) on top of debt tied securities, and this practice hid their risk; the debt holders were not paying their debts.
It is very possible that somebody's 401k went to shit if they put it all on a fund that tracked mortgage bonds for example.

Ok. I really have no reason to make up a story about this. But I'm not a financial advisor, and I really gain nothing by trying to prove it, so..

Your friend probably didn't lie. There is a lot of misunderstandings around the 2008 financial crisis. There are also tons of shit advisors all around. When I started investing, I paid for a Vanguard advisor, and I was able to beat his performance after a year. Since then, I haven't let anybody make decisions on my investments other than myself.

I "lost" 40k this time only on my 401k, but it is all paper money until you cash out. I already made 20k of that back.

 

[Mihos]

What do you mean? There are mutual funds that track different industries., and depending on which broker has your 401k, these funds are available to you.

The whole point of the 2008 crisis is that people created shady investment vehicles (mutual funds for example) on top of different securities, mainly debt tied, and this practice hid their risk; the debt holders were not paying their debts.
It is very possible that somebody's 401k went to shit if they put it all on a fund that tracked mortgage bonds for example.




Your friend probably didn't lie. There is a lot of misunderstandings around the 2008 financial crisis. There are also tons of shit advisors all around. When I started investing, I paid for a Vanguard advisor, and I was able to beat his performance after a year. Since then, I haven't let anybody make decisions on my investments other than myself.

I "lost" 40k this time only on my 401k, but it is all paper money until you cash out. I already made 20k of that back.

Show me one example in history... a single one... i will even allow mutual funds not allowed in a 401k portfolio that `lost everything' and I will give you a second glance. Much less, give me a single example of a single non retiree in 2008 that didn't recover by 2016.

 

[Lrnex]

Show me one example in history... a single one... i will even allow mutual funds not allowed in a 401k portfolio that `lost everything' and I will give you a second glance. Much less, give me a single example of a single non retiree in 2008 that didn't recover by 2016.

It could be that it wasn't invested in funds but instead stock ownership in a company that was on its way to bankruptcy. I know Enron employees suffered horribly from that, not sure if it's still a widespread practice though.

 

[Mihos]

It could be that it wasn't invested in funds but instead stock ownership in a company that was on its way to bankruptcy. I know Enron employees suffered horribly from that, not sure if it's still a widespread practice though.

Not a 401k...

 

[Lrnex]

Not a 401k...

It isn't as common and I think mostly just large public companies offer it, but it's definitely a (terrible) option for some plans. Only reason I know of it is from the Enron debacle and a manager at my last job constantly went on about how he loaded up his 401k with 100% of our company stock.
Short article about the practice

 

[Kagey K]

I'm thinking about going the other way, I've been sitting on a pile of cash for a while and might try investing some of it.

Mostly through my TFSA and then seeing where it takes me.

 

[haxan7]

I'm thinking about going the other way, I've been sitting on a pile of cash for a while and might try investing some of it.

Mostly through my TFSA and then seeing where it takes me.

Everything is lower now so you're likely to see significant gains when the general economic situation improves, especially if you're putting money into a managed fund and not selecting individual companies. It's also worth remembering that the current situation has been influenced by Iran selling oil for next to nothing almost as much as the pandemic.

 

[Kagey K]

Everything is lower now so you're likely to see significant gains when the general economic situation improves, especially if you're putting money into a managed fund and not selecting individual companies. It's also worth remembering that the current situation has been influenced by Iran selling oil for next to nothing almost as much as the pandemic.

Yeah I said I'd hold out until the end end of March to see if it gets worse, but it rebounded a bit, so now Im telling myself April will be worse.

I missed the 08 crash cuz I was broke then. I want to get on this rebound ride though.

 

[haxan7]

Yeah I said I'd hold out until the end end of March to see if it gets worse, but it rebounded a bit, so now Im telling myself April will be worse.

I missed the 08 crash cuz I was broke then. I want to get on this rebound ride though.

I think it's only gonna go up from here. If a democrat was in the White House we'd probably have a repeat of the 70s gas shortages but Americans chose Trump over Jimmy Carter.

Keep in mind I don't actually know what I'm talking about.

 

[MidgarBlowedUp]

I need a lot of stuff on my house fixed up, and with the CARES Act it looks like now is the time to dip into my 401K and get some stuff done. Was mostly just wondering what others think of this as I know most people with money will say to only use it as a last resort etc..but it's extremely tempting.

Is anyone else doing this? What are you doing with the money?

Not doing it yet but probably will do it soon. I wouldn't do it to "fix up the house" though, I only intend to borrow the amount I need to pay of debts and still be able to pay back to my 401k. I haven't lost any money this year though, I saw a recession coming nearly a year ago so I moved everything over to Bond markets. I Didn't expect the Virus to wreck the economy this much but I knew it was coming since January this year. I think it will be about a 6-9 month recession even though we have "technically" been in a recession since 2008 and never quite got out of it. We have technically been around 15-20% of real unemployment since 2008, if you include part time/underpaid workers, and it has only slightly improved. We are at about 25% right now.