Originally Posted by
Great Santini
Another questionable strategy is the 401K loan. You may borrow up to $50K or 50% of your 401K and pay it back over a 5 year schedule. You are essentially borrowing from yourself and paying yourself back at around 4.8% interest. I would definately not do this after a big down cycle like the one we are in.
Questionable is a polite way to put it! Taking a loan from a 401K really hurts compound growth of the remaining funds and diminishes cash flow for future contributions. In a down market most stocks are on sale so look for solid business plans and stockup. Dollar cost averaging still works.