Money Minute: Is It Time to Dive Back Into Stocks? How to Get $1 Million in Your 401(k)

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Stock market investing is becoming trendy once again. That's just one of the top money stories you need to know today.

Mom and pop investors –- that's us, the regular people –- are jumping back into stocks. Many retail investors had stayed on the sidelines and watched as the market rallied over the past several years. They've been reluctant to take the stock market plunge, ever since the financial crisis of 2008 wiped out more than a third of their retirement accounts. But some market pros worry the new-found optimism may signal the bull market is nearing an end.

The Dow Industrials (^DJI) rose 21 points yesterday, ending at yet another record high. The S&P 500 (^GPSC) added a single point and the Nasdaq (^IXIC) barely budged.

Can your retirement account rise to a million dollars, even if you're not a top executive? Fidelity Investments, which administers more 401(k) accounts than anyone else, says a lot of people have been able to do just that.

Here's how: they started young, put about 14 percent of their salary into their retirement account, and take advantage of their employer match. By age 59, on average, many people had retirement accounts worth more than a million bucks.
The News Corporation building is picture
Timothy A. Clary/AFP/GettyImages


Shares of News Corp. (NWSA) are set to slide after the media company posted disappointing sales in its first quarter as a stand-alone company. It recently split off its movie and broadcast businesses into a new company. News Corp. retains The Wall Street Journal and a number of newspapers in the U-K and Australia.

Another media company, Tribune, reported a profit even though sales fell. Tribune is also in the process of separating its profitable TV business from its struggling newspaper assets, which include the L.A. Times and the Chicago Tribune.

And jury selection begins today in the penalty phase of closely-watched case between Apple (AAPL) and Samsung. Apple won at trial, but the judge ordered a separate jury to decide on how much Samsung must pay for violating Apple patents on the iPhone and iPad.

-Produced by Drew Trachtenberg

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41 Comments

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ncaok

Yuppies in the stock market and brokerages need your money since the federal bailout has been lost.

November 15 2013 at 6:40 AM Report abuse +1 rate up rate down Reply
orlandcaro

I always remember that a wise man once said the best way to become a millionaire was to start with two million! Still good advise,no?

November 14 2013 at 4:00 PM Report abuse +3 rate up rate down Reply
ralph or pat

I trade on volatility and on each move up or down I buy or sell the following ETF's: IJR, IVV, IVW and IWM. I learned from the bust of 2000 not to buy individual stocks. In 2008 I learned not to be fully invested unless I purchased my holdings on each downward move. This strategy has worked, only I do not get the maximum gain on extended upward market trends, but then again I do not take as great a loss during extended downturns.

November 13 2013 at 10:52 AM Report abuse rate up rate down Reply
teltech544

Right now is good for buy low sell high the next day or two. Buy and hold is okay if you are looking for long term and are willing to keep it in. Buy now hoping it will keep going up short term ( a few months ) is out. There will be a few hundred point fall back pretty soon. Probably before the New Year.

November 12 2013 at 8:30 PM Report abuse rate up rate down Reply
1 reply to teltech544's comment
dweeeb.buster

The smartest prognisticators of the market never outperform the market over a long period. But stocks regularly outperform other investments over long periods.

Perhaps investors should take their cue.

November 12 2013 at 8:36 PM Report abuse rate up rate down Reply
hardingoffice

Chris1011 houston has the largest income disparity in the nation even more than New York with wall street so those fancy cars are being bought with large profits from low wages and no benefits

November 12 2013 at 6:09 PM Report abuse +1 rate up rate down Reply
Artie

This schools and education system in this country leaves a lot to be desired and has failed miserably to educate people about personal finance. Unless things have changed, you still don't see personal finance taught in too many, if any high schools or colleges that I know of. Schools in the meantime teach all sorts of useless stuff that no one will ever need to know in their lifetime. If anyone of relatively modest means wants to retire some day, they had better learn to "pay themselves first." This means they had better start saving and more importantly INVESTING at an early age. Also, recognize that the stock market has ALWAYS gone up and down. Howver, look whee the market was after the Great Depression and where it is today. It doesn't go up in a straight line but it historically gone up and now is at new highs. If you look at the history of the stock market, stocks have averaged a return somewhere around 10% -14%, not adjusting for taxes and inflation. Outside of an emergency fund, putting your money in a bank is going to be a losing proposition. You make almost no interest and that interest is taxable. Not the way to keep up with inflation that historically has been about 3%. Good luck "saving" for retirement with that mentality.

November 12 2013 at 5:14 PM Report abuse +2 rate up rate down Reply
1 reply to Artie's comment
theycallmeroy3

MEOW business pro MEOW



Nice one.

November 12 2013 at 5:31 PM Report abuse rate up rate down Reply
betty_brock

Love the sinner, hate the sin. Love the liberal, hate the liberalism/Communism.

November 12 2013 at 4:18 PM Report abuse -3 rate up rate down Reply
Alex Denton

It sounds like it would be very simple and easy to have a million dollar retirement until you add in the human factor. Most people are completely inept when it comes to money management. They barely know how much they spend a month. Most people don’t even have the math skills to know how to even use a calculator to calculate what 14% of their income is, let alone saving 14%.

America is a “paycheck to paycheck” nation so the reality is very few people will ever achieve this dream. I have been disciplined enough to stay on track with my investments. Luckily I will have 1.1 million (in today’s dollars) for retirement at 46 when I plan on retiring. That’s my worst case scenario. Realistically I’m on track to have anywhere from 1.7-2.4 million depending on how well my investments do.

November 12 2013 at 3:57 PM Report abuse +2 rate up rate down Reply
1 reply to Alex Denton's comment
betty_brock

A part of the dumbing down of America.

November 12 2013 at 4:18 PM Report abuse rate up rate down Reply
chris1011

A large number of jobs are being generated by our economy today. The country is divided into two distinct economic zones. Cities like NewYork, Boston, SanFrancisco, Minneapolis and Austin are generating huge numbers of high paying jobs, while cities like StLouis and Atlanta are generating large numbers of very low paying jobs. The difference is striking when you visit some of these places. I was in SanJose recently and the cars you see on the highway are high end European sports cars, whereas in StLouis you will see old Chevies and rusted pickup trucks.

The Atlantic Magazine recently had an article about this divide. While the South and Midwest rust belt is stagnating, the eastern seaboard cities from Baltimore to NewYork to Boston by themselves generate a larger GDP than all of England. And most of this wealth is in the form of information and high tech, which pays very very well.

November 12 2013 at 3:23 PM Report abuse rate up rate down Reply
mac2jr

Then there is the 'long-term' risk of 'who' is maintaining the investment for you. The 401(k) came into being due to Company Retirement Funds being 'wiped out' by company CEOs, company closings, companies going broke, companies being taken over by others, companies being sued, employee's getting fired or moving before being vested, etc. The 401(k) was to counter this with a 'Portable' retirement fund that would move with the employee. As we have seen, the 'Managers' screwed up and millions lost trillions in the last years of the Bush Administration.

November 12 2013 at 1:07 PM Report abuse rate up rate down Reply