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Warning from Motley Fool Poster Polymermom: "Check Your 401"
Posted by: freethinkerkeywest
Date: 03/06/2007 05:46AM
Polymermom is a regular poster on Motley Fool's "Misheldo" board. Since many members of markettraders.com are not members of Fool, I am reprinting her short post here:
Always check a new 401k fund ASAP!
Earlier this year I received a note saying the Core Bond Fund in my 401k was changing to a new bond fund this year. They nicely transferred the old holdings to the new fund without any cause for action on my part.
The return looked impressive: ~4.5% vs. ~1.6%. Both were int. term (2.5-5 yrs duration).
They finally got around to posting the new fund's top 10 holdings and per cent asset categories. The new fund is almost 37% invested in mortgage securities. The old was only a tad over 1%.
So I moved my holdings to a money market fund from the new bond fund today. Imagine my surprise when the value of the fund had dropped almost 13% from Friday to today!
The HR analysts were chasing yields without a thought as to risk<sigh>. I wonder how many will even realize what is happening...
http://boards.fool.com/Message.asp?mid=25250558
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