If you had bought $1,000.00 of Nortel stock one year ago, it would now be worth $49.00.
With Enron, you would have $16.50 of the original $1,000.00.
With Worldcom, you would have less than $5.00 left.
If you had bought $1,000.00 worth of Budweiser (the beer, not the stock) one year ago, drank all the beer then turned in the cans for the 10-cent deposit, you would have $214.00.
Based on the above, my current investment advice is to drink heavily and recycle.
This is a new retirement program, I call it the 401Keg
. . . that a 401(k) is the best single way to save. I even advised a B-I-L who was saving for a house to put ALL of the money in a 401(k) because the earnings would so far outstrip his after-tax dollars – but all he could think of was the measly withdrawal penalty.
That said, you never do the following:
put 401(k) dollars in the company for which you work. That’s the opposite of diversification, which the fundamental principal of modern portfolio theory. I wish that I’d save all the clips of the Enron employees bragging about their financial acuity.
chase the market. Losses aren’t deductible in a 401(k). Buy and hold.
