They are starting to get too large to maintain the same historical growth rates. Plus, I’m not sure how well they will weather the recession. I don’t expect much downside risk, but don’t expect too much upside either.

There is no other company I’d hold long right now though. Warren is the exception to the rule.

Regarding 401k plans …some of them are a nightmare. My wife just started a new job and she could choose from maybe 12 equity funds and 3 bond funds (and no cash option).
- Equities were obviously out.
- After googling the bond funds I discovered 2 of them had mortgage backed securities in them!
- The final bond fund was treasuries (which is what we went with). It returned something like 1.27% last year (below inflation), but hey …preservation of capital!! Plus the tax deduction gives you a ~25% return the first year (depending on tax bracket).

Buffet actively manages many of the companies he puts in his investment stable. This is something the average 401K employee can’t do.

The 401K investor is given a limited number of choices. Most options mirror the market or some index.

Lest you think this strategy doesn’t work, I have two words for you. Warren Buffet.

I’m pretty sure that he made giant piles of money from 1964 all the way through 1982.