401k Q&A

Q: It seems like most people are saying this AT&T/Time Warner deal is going to get approved soon and I’m thinking their stocks are going to get a nice boost if it does. Is there a way I can invest in those companies in my 401k?

A: Awesome question! Sure feels like this dance has been going on for the last decade, right? Cost analysts seem to think the deal will go through, but then again, analysts are wrong all the time. And, even if it seems likely they’ll get this right, it still doesn’t guarantee a positive outcome for both stocks or either of them. Individual stocks are tricky and it’s nearly impossible to know how a stock is going to react to headlines like this, especially when the story has been drawn out for such a long time. When we talk about mergers, sometimes both stocks react positively, sometimes both react negatively, and sometimes one goes up and one goes down. Over time, things tend to get sorted out, but the bottom line is that investing in individual stocks is simply too risky/stressful for most people, in our opinion. And unless you work for either of them, odds are you won’t be able to invest solely in one or the other inside your 401k. Don’t fret, since it’s probably best for most folks in the long run anyways, regardless of what you think of these two companies and what the deal may or may not mean for their future.

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The information is provided for discussion purposes only and should not be considered as advice for your investments. The information does not represent a recommendation to buy or sell securities. Please consult an investment advisor before you invest.

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