Not retired yet should I move 401k before election

[badatmath]

I seem to be one of the few at w*rk I know who is not planning to move 401k to fixed around election time. Am I wrong?

Likely to leave in next 2-3 years. Or be forced out before then. I have always figured since I didn't know what I was doing best to stay the course but. . . still.

 

[Closet_Gamer]

As a general rule, market timing on any variable is very hard to pull off. In 2016 people thought the market would do poorly after the election. It didn't.

I would stick to your asset allocation. If you're thinking your long term AA is wrong, address that but not because of a specific event.

Two of the smartest people I know tried to trade the pandemic. One sold big before the crash and thought he was genius. The market turned and by the time he got back in all he had done was generate a bunch of capital gains taxes and get back in near the top with less money. The other got behind both curves, wound up selling at the bottom and buying near the top.

My 2¢. YMMV.

 

[Nick12]

Don't do it. Stay the course.

 

[badatmath]

Thanks guys I just needed the reminder.

 

[OldShooter]

Really, all you need to know about market timing is here: https://www.bogleheads.org/wiki/Taylor_Larimore%27s_market_timing_quotes More than you needed to know, actually.

The heavy lift, because its so incredibly non-intuitive, is to accept that the market is almost completely approximated by a random process. From that comes the easy observation that no one can predict random. And then ... the market timing question is easily answered, as are many other questions.

If it's any help, the assumption of randomness underlies all of Modern Portfolio Theory. "Modern" dating from 1952. Old news, actually.

... I have always figured since I didn't know what I was doing ...

No one else knows what they are doing either, but not all of them realize this.

 

[ut2sua]

OP, since you asked the question, that might be an indicator that you AA is more agressive than it should be (remember AA is a very personal thing). Your job's uncertainty could add to that. So moving to a more conservative AA could be the right move for you (60/40 or 50/50 or 40/60 stock/bond). Ask yourself how would you feel if your stock portion goes down to half the value in the next year or so. If that is too painful, then reduce stock holding is a good thing.

 

[HI Bill]

I seem to be one of the few at w*rk I know who is not planning to move 401k to fixed around election time. Am I wrong?

If you're thinking of moving 401(k) assets to fixed around election time, then you'd better have a really good crystal ball. I know I don't, and I get almost every market reaction wrong. If I were to try to time the market, I'd have to go opposite of my gut instinct, which would obviously be quite hard.

If you need to (to sleep well at night, or to resist panic selling), migrate your AA to a slightly more conservative stance, and/or ensure that you have 3-4 years (of your projected expenses or spending) in cash/bonds/cash equivalent, and then "stay the course" (Vanguard). I'd go with the latter, so that no matter what happens, you can draw from cash/bonds/fixed in the event of a downturn, and if it doesn't, then you can take from funds/equities with gains.

 

[Al in Ohio]

I can see making a small AA adjustment before the election. 5% shift at most to appease your inner voice , but any more than that will be an over reaction to trying to time the market with your entire portfolio over one variable. Overall you need to stay the course with your comfort level AA target regardless what happens throughout that year. If you cannot, the market may not be for you. I’d be more concerned with the big correction we are due after we borrowed trillion of dollars from our budget than the election results.