Forget Balancing - sold all my 401k equities funds and put it in the safe short term

[Big_Hitter]

Quote:

Originally Posted by Dawg52 Forget Balancing - sold all my 401k equities funds and put it in the safe short term Ohhhh you will get a lot of backlash here for doing that. Market timing, not keeping up with inflation and all the rest.

short term fund will keep up with inflation

i don't see anything wrong with this move - I did the same thing in early 2000

personally, i'm going to hold off a bit then make a similar move in my 401k - taxable accounts are a different story

[Texas Proud]

I think taking everything out is the wrong move.... if you think there is a correction coming soon (and why take out now if you do not think it is soon) but you are wrong, you pay dearly... but if you left 30% or so in the market then you would have hedged your guess...


I have heard a few talking heads think that the market will have a correction in 2018 but will be up by the end of the year by upwards of 10%.... they only predict a correction because it has been so long since we have had one...


My big question would be... when do you plan on putting it back? As some have said before, market timing takes two correct decisions to work... get one or both wrong and it can be a disaster....

[Moemg]

In 2008 there were a few members who did sell all and just waited out the crash .They seemed brilliant at the time .Having been through a few crashes the signs are obvious before the tech crash everyone thought they were brilliant investors and even sports bars had ticker tapes running and before the housing bust everyone thought they could flip houses and make a huge profit .The only market timing I do is every time W2R says the Whee word I skim profit off the top .

[Big_Hitter]

Quote:

Originally Posted by Texas Proud My big question would be... when do you plan on putting it back? As some have said before, market timing takes two correct decisions to work... get one or both wrong and it can be a disaster....

i started reinvesting in the market around 2007, i miss timed the exit a bit but things have worked out

not sure who or what is saying there is a 10% ror expectation - CMAs are way down this year due to the big uptick last year

[LRDave]

I think 2018 will see a big drop. I thought that about 2017 too, so......


This is a case where my incredible powers of procrastination really help me out!

[LOL!]

rayinpenn forgot to tell us that his 401(k) is only 2% of his total assets, so that selling all in it don't mean thing.

I don't think I'll sell any equities until at least 3 people say they are switching to 100% equities in their 401(k)s.

[marko]

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Originally Posted by RetireAge50 One time I thought about that but then realized I still might live another 50 years. Market will probably double 5 more times in my life.

Someone once posted here that if you stand back a few feet from the Dow's 100 year historic graph, it's a pretty straight line in the upward direction.

[foxfirev5]

This thread is another reason why I'm capping my equity stake at around 45%. In this market the dividend w/d's (currently a whopping 1.65% for TSM) barely make a dent. If it loses 50% I'm still OK. If it gains 50% and I'm only at 40% equity due to taking gains I'm still good.
I can't use the sleep well at night test since I slept well when I was broke and I still sleep well.

[Major Tom]

rayinpenn - you must do whatever it is that makes you feel comfortable and helps you sleep at night, but I hope you have thought out what you are going to do in the long term now that all your equity money is out of the 401K. Without a solid plan, the stress that caused you to sell could just be stretched out over a longer period as you try to decide what to do next - as in, when do you get back in?

Over the course of the years, my balance bobbed up and down, but I didn't pay it too much attention. When the next inevitable correction (dip, precipitous dive?) comes, I'll just mentally readjust to a point a few years ago,and realize that I still have more money than I did at that point. But mostly, I won't think about my money that much - I like to think about it more when the balance is going up

If this helps you sleep at night, then that is the most important thing.


EDIT - I just saw this -

Quote:

Originally Posted by LOL! rayinpenn forgot to tell us that his 401(k) is only 2% of his total assets, so that selling all in it don't mean thing.

Now I feel silly, because it doesn't matter too much what you do with it. It's not enough to significantly affect your long term outlook.

[Which Roger]

Quote:

Originally Posted by rayinpenn I’ve been investing so long it is more money then this guy from very humble beginnings could have every imagined.

If what you mean by this is "I've more than won the game", i.e., you have more money that you would ever possibly need, then getting out is a perfectly rational strategy.

[exnavynuke]

Quote:

Originally Posted by rayinpenn I don’t believe in trying to time the Market

... but I'm trying to time the market could have finished your post. I'd wish you luck, but I'm hoping the market continues to climb (overall) until I'm long-dead and you're betting it's about to fall.

I'm guessing you don't have a defined strategy/timing for getting back into the market either?

[Dawg52]

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Originally Posted by CaliKid I see no problem with your plan. If you sleep better then it's the right thing for you. At the end of the day that matters a lot! If it were me I might consider just a less aggressive portfolio. It doesn't have to be all or nothing.

That's been my thinking for a while now. I've missed out as compared to many, but so has someone with a 50/50 blend as compared to someone all stocks. The problem is finding the right mix for longevity and taking care of the pucker factor. The old pucker can get in the way.

[NW-Bound]

I am going to do a rebalance. From high-flying semiconductor stocks to Powerball tickets.

Just kidding.

But I have written more out-of-the-money call option contracts. If the stocks keep on rising and they buy these from me, it's OK. Stock AA keeps on rising, and it's at 73% now. Maybe I set the strike price too high, and the options keep expiring worthless.

[REWahoo]

Quote:

Originally Posted by Dawg52 I've missed out as compared to many, but so has someone with a 50/50 blend as compared to someone all stocks. The problem is finding the right mix for longevity and taking care of the pucker factor. The old pucker can get in the way.

+1

The Market Unpleasantness of 08/09 educated me on where I needed to be to manage the pucker factor. For me, an AA in the 40-45/60-55 range does the trick and keeps the urge to "sell now before the crash" at a non-lethal level. Thanks to the Wellington and Wellesley management team and crack computer staff, I can maintain that AA range by doing what I do best - nothing.

[HadEnuff]

Quote:

Originally Posted by REWahoo +1 The Market Unpleasantness of 08/09 educated me on where I needed to be to manage the pucker factor. For me, an AA in the 40-45/60-55 range does the trick and keeps the urge to "sell now before the crash" at a non-lethal level. Thanks to the Wellington and Wellesley management team and crack computer staff, I can maintain that AA range by doing what I do best - nothing.

I agree. I have missed a lot of the BIG returns others brag about, because I have kept my AA around 45-55, but thankfully, that 45 has boosted my NW. I am 64, and I believe I have enough to last my days. If the market continues it's run-up, the 45% will be more than enough to keep me in clover, and if/when it tanks, I'll have enough money handy to reset my AA, maybe even a tad higher.

I am an habitual checker of my balances, which is great fun while the market soars, however, I have to try to keep reminding myself that number could be 80% smaller tomorrow, and that's OK...I'll still be OK

[easysurfer]

Quote:

Originally Posted by HadEnuff I agree. I have missed a lot of the BIG returns others brag about, because I have kept my AA around 45-55, but thankfully, that 45 has boosted my NW. I am 64, and I believe I have enough to last my days. If the market continues it's run-up, the 45% will be more than enough to keep me in clover, and if/when it tanks, I'll have enough money handy to reset my AA, maybe even a tad higher. I am an habitual checker of my balances, which is great fun while the market soars, however, I have to try to keep reminding myself that number could be 80% smaller tomorrow, and that's OK...I'll still be OK

When the market soars, I check my balances. When the market tanks, I don't panic and check the number of shares.

[audreyh1]

I prefer to hedge my bets by staying diversified. I can’t see getting completely out of any major asset class. A small reduction maybe.

Do you have any taxable investments in equities? Or are you completely out.

[Ready]

I keep my allocation at 55% equities, which is probably far more conservative than I need to be but it allows me to sleep at night. Well, actually I'm an insomniac, so I don't sleep anyway, but it's not because of the stock market.

I do worry about how much the market has run up and the inevitable correction, but I remind myself that it's just part of the risks associated with being in the markets and trying to time the swings is virtually guaranteed to fail.

[Lsbcal]

Just sold stock yesterday. A whole 1% of portfolio to rebalance back to 50/50. I had gone from 60/40 in November to 50/50.

Bonds are no bargain but won't loose as much as equities should we have a bad period.

[Big_Hitter]

Quote:

Originally Posted by Lsbcal Bonds are no bargain but won't loose as much as equities should we have a bad period.

I don't think anything is a bargain right now. That's why capital market expectations are so low.