Author Topic: early investing mistakes- what should I do to get back on track?  (Read 4578 times)

DC10

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I am not a savvy investor and it was not something I had an interest in when I started- but I always knew to save in my 401-K- and started my first in my early 20's- I am now in my 30's.

Today I decided to look back and see the allocations and apparently my 20-old self selected bond funds and even a money market for my employer 401-K contributions. That means for the last 13 years- about 1/5th of my balance did nothing! I didn't notice because overall the account did increase as newer investments were in other mutual funds but I didn't think to compare the %increase with what the stock market was doing. 

I am really disappointed in my mistake and all of the missed earnings- I want to switch it over to all stock today, besides the obvious fact that the market is high right now- is there any legitimate reason not to make the switch- today, right now?

Live and learn I guess... Thanks in advance for any advice/guidance

DC10

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Re: early investing mistakes- what should I do to get back on track?
« Reply #1 on: October 31, 2014, 02:33:57 PM »
I should add that my 401-K will still have some diversification even if I move the money market/inflation linked bonds in this one account to all stocks.

Zoot Allures

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Re: early investing mistakes- what should I do to get back on track?
« Reply #2 on: October 31, 2014, 02:55:45 PM »
Just to clarify, your asset allocation is about 80% stocks and 20% bonds/money market funds? If so, I'm not sure where the mistake is. 80/20 is considered an aggressive AA. How do you know for sure that you "missed earnings"?

johnny847

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Re: early investing mistakes- what should I do to get back on track?
« Reply #3 on: October 31, 2014, 05:06:32 PM »
The "lost gains" (if in fact, you did actually miss out on gains) from the past 10 or so years is a sunk cost. You should not let that be a factor in your investment decisions (and it seems like it is currently?)

When you say you want to switch it over to all stock today  - out of your total portfolio, how much will be in stocks?

Do not try to "make up for lost time" - you're just going to take on more risk than you should. I know it's tempting, but really, you shouldn't.

GGNoob

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Re: early investing mistakes- what should I do to get back on track?
« Reply #4 on: October 31, 2014, 05:36:51 PM »
Why don't you post your current allocation (Fund name/ticker and % of your balance in that fund) and then post all of your available funds with their expense ratio. I'm sure we can help you come up with a decent allocation.

Also, is this your only investment account?

surfhb

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Re: early investing mistakes- what should I do to get back on track?
« Reply #5 on: November 01, 2014, 10:07:19 AM »
You're  fine.    The question is did you pay unneeded fees in managed funds?   List your AA and the funds available in your 401k

RichMoose

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Re: early investing mistakes- what should I do to get back on track?
« Reply #6 on: November 01, 2014, 07:50:39 PM »
You should focus on the future, not the past. Decide from this point on what your asset allocation is (what you personally are comfortable with) and go from there. On this forum you will quickly find that everyone has wildly different views on what they view is a prudent asset allocation. Commonly anything from 60/40 to 90/10 is "acceptable"; 90/10 obviously being substantially more aggressive and at this point you're really just keeping that 10% bond as dry powder etc in event of a downturn.

Think about what AA you are comfortable with and what you would be able to stomach for losses in a down market. The real key to portfolio success is never to sell, no matter how bad things look. Buy low-fee index funds and keep buying based on your desired AA no matter what.

GumbyPickles

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Re: early investing mistakes- what should I do to get back on track?
« Reply #7 on: November 03, 2014, 07:14:40 AM »
20% bonds and you're freaking out?  That means 80% of your balance shot up with the market. 

I'm not sure what the problem is here.

marty998

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Re: early investing mistakes- what should I do to get back on track?
« Reply #8 on: November 03, 2014, 01:34:21 PM »
I would love to have "missed out on gains" rather than have lost money....

DC10

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Re: early investing mistakes- what should I do to get back on track?
« Reply #9 on: November 04, 2014, 07:35:34 PM »
Thank you for all of the helpful feedback-  I think I was just disappointed that those first dollars I put away in retirement was during a time where I had very little income, was going to school at night, hoarding quarters for laundry, living off beans and rice... and to think that those dollars hadn't earned anything was frustrating- but you all have provided some much needed perspective. I need to just get over it and move on and be thankful the money is still there.

A number of other mutual funds that I have in my 401K also have some conservative holdings so the total allocation would be over 20%- but I do not know the exact number.

I like the suggestion of listing everything out to have a better idea- I think that is my next step. Every time I changed jobs over the last 15 years, I would pick a few new mutual funds so I have a number of accounts, luckily with the same company, but a little messy to try and make sense of.

I am very thankful to find this very helpful and welcoming community.