A late-career correction to gain balance in holdings
Q My IRA is way down. I'm almost 58 and looking forward to a number of additional years of work. I'm self-employed and haven't been able to invest much. When I bought the stock funds in August 2000, the net value was about $42,956. The current value is $30,868. My investments are Berkshire Focus, a large growth fund, at 15 percent of the portfolio; Bjurman Small Growth Fund, at 30 percent; Dresdner Biotechnology, at 36 percent, and IBM, at 19 percent. Is there any long-term hope that I will recover the original value from these investments? Do I start over with a more conservative strategy?
Name withheld, via e-mail
A"You were pounded heavily because you have such a large commitment to growth and technology sectors, which have sustained heavy losses," says Paula Hogan, a financial planner in Milwaukee, Wisc.
Whether you get your original value back anytime soon is problematic, given current weakness in the high-tech sector, Ms. Hogan says. "You are not really diversified. I would take some money out of the fund with the highest expense ratio and shift it into a low-cost index fund. Also consider shifting assets to value stocks and some fixed-income (bond) products," she adds.
QMy husband had $800 in a 401(k) account with his company. He recently left his job. I've discovered that the account was cleared out through a "distribution" of assets. The account now lists a zero balance. Perhaps he got the check and cashed it out. But I'm left wondering: How can a person check up on their 401(k) account to see if there is any type of mistake or hanky panky during a distribution? I assume that everything was correct in this case. But what if it wasn't?
A"Start by tracing the check issued to your husband by the 401(k) plan administrator," says James Hunt, with the New York office of the Pension and Welfare Benefits Administration of the US Department of Labor. Ask the bank issuing the check to see if it was cashed and by whom.
If it was not cashed, have the plan administrator issue a new check. You may have gotten the check and not even known it, says Mr. Hunt, since companies can close out accounts under $5,000 without your permission when you leave your job. If hanky panky is discovered in a 401(k) plan, "a participant should notify their state attorney general's office," Hunt says.
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