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Four Easy Ways to Jump-Start Your Ailing 401(k)

401K

(By Christine Benz, Morningstar)- Remember the late, great 1990s, when keeping watch over your 401(k) was actually fun? Never mind that the market, and technology stocks in particular, were ridiculously overvalued. For a brief, shining moment, even lousy funds and poor 401(k) plans were posting mind-boggling gains guaranteed to bring a smile to your face.

A three-year bear market that ended in early 2003, followed by 2008, the worst bear market since the Great Depression, has sobered most people up. Greed has turned to fear. Retirees have had to go back to work and pre-retirees are coming to grips with the notion that the traditional retirement age of 65 is a relic of a bygone era.

In talking to individuals in their 30s, 40s, and 50s, I'm hearing a lot of statements like, "I know I have time, so I'm not worried." and, "I'm just not looking at my statements." That's generally encouraging. After all, being able to tune out the noise is one of the keys to successful investing. And we're so far into this bear market that one of the worst things those with long time horizons can do is to panic and shift everything into cash. Not only would you miss the rebound in stocks, but you'd also be left wondering when is the right time to get back in.

It's possible to strike a balance between checking your 401(k) account every morning (and tempting yourself to make inopportunely timed changes) and complete and utter portfolio neglect. The following steps should get you on your way. Read More

Showing posts with label Term Asset Backed Securities Loan Facility. Show all posts
Showing posts with label Term Asset Backed Securities Loan Facility. Show all posts
10:35 AM 0 comments

So The U.S. Fed Think They Can Dance With $800 Billion?



Washington, D.C. - Is the Fed finally figuring it out?

Early Tuesday, the U.S. Federal Reserve and the Treasury have decided to step up their efforts to unfreeze credit for the consumers and home buyers by providing up to $800 billion, which is more than what Congress authorized in October.

But the news reports seemed to consider the billion-dollar plan as a backstop for the asset-backed-securities program originating entirely from its Troubled Asset Relief Program (TARP).

Secretary Henry Paulson announced the measure today "to finance the issuance of non-mortgage asset-backed paper in order to support lending to consumers and small businesses that is vital to our economy."

The consumer asset backed securities market is a source of liquidity to financial institutions that provide federally-guaranteed small business loans and consumer lending such as auto loans, student loans and credit cards.

The central bank of the country is prepared to purchase $600 billion in debt issued or backed by government-chartered housing-finance companies, according to Bloomberg News.

The remaining, issued by the Federal Reserve Bank of New York, will be used to aid consumer and small-business loans under Term Asset Backed Securities Loan Facility.

"By providing liquidity to issuers of consumer asset backed paper, the Federal Reserve facility will enable a broad range of institutions to step up their lending, enabling borrowers to have access to lower cost consumer finance and small business loans," Paulson said.

The statement from Paulson indicated that issuance of such securities in these areas reached $240 billion in 2007, "but credit market stresses led to a steep decline in the third quarter of 2008, and the market essentially came to a halt in October."

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