written by reader “401K Trading System” A total scam?!

By pat555, June 27, 2013

Howdy–wondering if anyone here has tried Todd Larsen’s 401K Trading System? His system is mentioned in a LA Times article as a ”safer way to grow your retirement income.” http://www.401ktradingsystem.com/about-us
I’m an investing newbie & easily sold– hook, line & sinker–so many thanks for your insight & expertise as it sounds too good to be true!

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vrader
7 years ago

It looks to me that they are using some kind of market timing techniques. The record on the site seems to be indicate that the system works but …

I have learnt the hard way that paid services are generally not worth money. It is true for specially those services which are tell you that they will give you a ‘signal’. Gumshoe I like as Travis is just sharing info & I read it for fun. Note, I haven’t bought on stock based on his recommendation but I still pay the irregular subscription 🙂

I keep 20% of my funds in a low cost bond fund, 20% in low cost emerging market fund and I use small dogs of dow for my 401(k) along with Tier 1 from http://www.amazon.com/Neatest-Little-Guide-Market-Investing/dp/0452298628 for the rest. I have a simple logic, stock markets will go up in long term, so no point timing it. Just keep chipping in slowly. If they go bust then I doubt any system can make money unless you are trading on the short side too.

Please note that I am just sharing what I do and by no means suggesting that you follow it. Just read, research and let your 401(k) by on auto-pilot till you are confident that you understand what you are getting into. Also, if your 401(k) allows, use ETF instead of mutual funds. ETFs are much cheaper and MF are not much better.

Oh! Please start by reading ‘Reminiscences of a Stock Operator’. IMHO, each broker should send a copy of this book when someone opens an account with them. Of course, they won’t as you won’t trade too much after reading it 🙂

good luck

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pat rybovich
pat rybovich
7 years ago

Hi Vrader,
Wow, awesome response
Thanks so much for your thoughts on the 401 Trading System…sounds best to steer clear.
The “Neatest Little Guide” looks great & has good reviews—will up a copy and delve deep!

I really appreciate your sharing your investing approach. It sounds reasonable & something I can probably learn on my own:
20% low cost bond fund
20% low cost emerging market fund
401(k) on auto-pilot, picking ETF’s and not mutual funds.
So far so good…

But as a newbie I have a question about Tier 1 and those small dogs…can you say more about “the small dogs of Dow”?!
Many thanks again! Pat

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vrader
7 years ago

Dogs of dow is a system where you buy the 10 stocks in the dow with the highest yield. You do this every year on a fixed date. Basically, sell stocks you bought last year and buy the sticks based on yield this year. Small dogs are the 5 cheapest stocks of the above mentioned 10. This link has more info
http://www.dogsofthedow.com/dogsteps.htm

again, past returns are no guarantee of future returns but you are buying the heavy weights and updating your portfolio every year.

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