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Unintentional market timer
Old 01-02-2016, 11:00 AM   #1
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Unintentional market timer

I transferred a significant amount of money from my Vanguard IRA S&P 500 index to my Fidelity 401K S&P 500 index. I wasn't able to do a share transfer, I had to sell, wait for the check to arrive via snail mail and then overnight it to
FIDO. Now I understand the rush of sell high buy low. Sold when the S&P was
2091 and bought back in at 2005. Had it not worked out I'd be here singin' the blues.
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Old 01-02-2016, 11:05 AM   #2
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Lucky you for market timing by default.
While I understand transferring funds from a 401K plan to a rollover IRA, I
am a little confused when you say that you transferred funds from IRA to a 401K plan.
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Old 01-02-2016, 11:19 AM   #3
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One can transfer into 401(k) plans that allow it. A "rollover IRA" may have money that was originally in an older 401(k) plan, so this is suitable for some 401(k) plans to accept.

One reason to do this is to reduce the taxes on the pro-rated rules for Backdoor Roth IRA conversions.
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Old 01-02-2016, 11:27 AM   #4
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Lucky you for market timing by default.
While I understand transferring funds from a 401K plan to a rollover IRA, I
am a little confused when you say that you transferred funds from IRA to a 401K plan.
Yep 401K to IRA is the normal route but in my case it causes a problem. I worked for Megacorp1 for many years, quit and did the normal rollover to an IRA. I then went to work for Megacorp2 and started a new 401K. The problem is I don't have enough in Megacorp2 401K to last from ages 55 to 591/2.
I can access my 401k penalty free at 55, or Jan. 1 in the year I turn 55,to be more precise.

I learned some, not all 401K plans allow IRA to 401K rollovers in this forum.

I'm aged 54 and will be 55 this fall so as of yesterday, Jan 1 when I leave Megacorp2 I can take money out of my 401K penalty free.
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Old 01-02-2016, 11:41 AM   #5
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Thanks LOL for explaining the IRA to 401K transfer.
Olbidness : I am happy for you.
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Old 01-02-2016, 12:09 PM   #6
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Well like we use to say at w*rk...

Even a blind squirrel will find a nut every once in a while.
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Old 01-02-2016, 12:24 PM   #7
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Well like we use to say at w*rk...

Even a blind squirrel will find a nut every once in a while.
I'll take luck over skill every time!
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Old 01-03-2016, 07:46 AM   #8
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I worried about the market going the other way several years back when I transferred a large block of mutual funds from an outside account to Vanguard. Some stuff just transferred straight over to a VG brokerage account. For the equity funds that required liquidation and new purchases (and the hair raising wait) I temporarily exchanged an equivalent amount of bonds for an S&P index in DW's 401K to offset any change in the stock market during the transfer. that was something I learned about here. In my case, IIRC, the market went up so the insurance paid off.
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Old 01-03-2016, 09:23 AM   #9
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I thought about doing the transfer in several smaller amounts or doing an option trade but in the end decided against adding any more complexity than necessary. I don't anticipate ever having to do a trade this large again so I'm glad it worked out.
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Old 01-03-2016, 09:40 AM   #10
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The market does have more up days than down days. Even during bear periods, statistics show that 51% of the days were up compared to 49% down days.

However, offsetting this is the fact that the market goes down harder than it going up. I am reasonably diversified, and I have seen that on bad days, I lost 2x or 3x as much as I gained on good days.

So, it's all a crap shoot when you are faced with a delay when transferring your account in cash. Cheers to the OP for lucking out.
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