I just sold it all

[mickj]

Not quite sure why, call me a dirty market timer, but I just sold all of my assets in my 401k and put them in the money market fund. Now the hard part is to figure out how and when I want to start investing again. It is only about 50k that I have invested. I am only up about 8% for the year. Thoughts, suggestions, insults..?

 

[brewer12345]

Why did you sell? Specific outlook or just the hoeebie-jeebies? If the former, you should have a good idea of what to do next. If the latter, I would stick i in a mMF until the smelling salts have brought you around.

 

[REWahoo]

Now the hard part is to figure out how and when I want to start investing again.

Ah yes, there's the rub now, isn't it?

 

[grumpy]

mickj,

Fortunately you can now learn an inexpensive lesson since there is only $50k involved. Unless you get very lucky you will miss the next big move upward and will kick yourself for trying to time the market. Its a losers game.

Grumpy

 

[Cut-Throat]

Not quite sure why, call me a dirty market timer, but I just sold all of my assets in my 401k and put them in the money market fund. Now the hard part is to figure out how and when I want to start investing again. It is only about 50k that I have invested. I am only up about 8% for the year. Thoughts, suggestions, insults..?

Hocu*s can tell you. I am sure there is a forum somewhere, where he is posting. He's got a 'magic forumla that will tell you exactly when to start investing in the stock market again.

 

[astromeria]

Up 8% on the year is pretty good this year--that's about a percent per month, which is my general goal over time.

VTI (Vanguard Total Stock Market ETF) is up only 6.35% YTD.

 

[rs0460a]

Youngsters - they have no faith in the future...  

- Ron

 

[retire@40]

Not quite sure why, call me a dirty market timer, but I just sold all of my assets in my 401k and put them in the money market fund.

That's OK.  I'm sure there was someone else today that just took $50K out of their money market account to buy some equities.

In fact, more people bought today than sold and the market went up.

 

[mickj]

That's OK. I'm sure there was someone else today that just took $50K out of their money market account to buy some equities.

In fact, more people bought today than sold and the market went up.

This always confused me, doesn't the number of shares sold and the number of shares bought have to be equal to each other every day? but I get your point.

 

[donheff]

Not quite sure why, call me a dirty market timer, but I just sold all of my assets in my 401k and put them in the money market fund. Now the hard part is to figure out how and when I want to start investing again. It is only about 50k that I have invested. I am only up about 8% for the year. Thoughts, suggestions, insults..?

You sound like a young guy with a long investment horizon. How could you read this forum and pull all of your money out of equities without a reason?

How about just putting it all back in with a new basis? Pick some good index funds and forgetaboutit.

 

[mickj]

You sound like a young guy with a long investment horizon. How could you read this forum and pull all of your money out of equities without a reason?

How about just putting it all back in with a new basis? Pick some good index funds and forgetaboutit.

That is probably what I will end up doing, I am considering putting all of my money into the Wellesley admiral fund. I would say this is just the "heebie jeebies." As I said before I don't really know the reason I did it. I guess it was just a feeling I had while reading all of my usual news sources. I don't think it was wise but hopefully I won't regret the decision later.

 

[yakers]

Well, Wellsley is a good fund, my wife's IRA is in it and I like its holdings and its history. What I would recommend is mostly going with that fund (as you sound pretty risk adverse) and adding some % holdings in another diverse/more aggressive fund like Star, Lifstyle, Target Retirement or something. Then when you get to the withdrawal phase take money out of the fund that is performing better.

 

[mathjak107]

It always feels so great the day you bail,and even better when the market drops, can you say genius. But as we all experienced more ofton than not the word "idiot" seems to crop up more as the market rises without you and you end up getting back in higher than you bailed. Used to be me to a tee. and why i went to following my newsletter.

 

[bpp]

In fact, more people bought today than sold and the market went up.

This always confused me, doesn't the number of shares sold and the number of shares bought have to be equal to each other every day?

Picture if you will: 100 people buy 1 share each, and one person sells 100 shares. Now you can both be right. (Though it doesn't explain why the market went up or down.)

 

[mathjak107]

Its all about volume of shares and bids and offers, thats what moves us up and down.

 

[Gone4Good]

This always confused me, doesn't the number of shares sold and the number of shares bought have to be equal to each other every day? 

Yes buyers must equal sellers. But the number of buyers wanting to buy at today's opening price was greater than the number of sellers who were willing to sell at that price. So the price goes up until enough buyers drop out and enough sellers come in to reach equilibrium between supply and demand.

 

[JohnEyles]

As I said before I don't really know the reason I did it. 

Maybe it's because this country is facing multiple impending train wrecks,
and we simply do not have leadership with the willingness to make the
tough decisions necessary to address them (I don't necessarily
put all the blame for this on the Republicans):

(1) The abomination that is our health-care delivery system, coupled with
the rising number of aging baby boomers.
(2) Global warming, the energy crisis, and foreign oil dependence.
(3) The mess in the middle East, and the continuing threat of global terrorism.
(4) The social security system.
(5) Our education system, and the implications for global competitiveness,
coupled with the emergence of China and India.

That's all I can think of in 5 minutes.   Sorry if I forgot some.   I don't mean
to hijack this into a political discussion, and as I said, I don't purely blame
the party in power.

The point is, I don't blame  anyone who thinks it's foolish to have ANYTHING
in stocks.

 

[retire@40]

Maybe it's because this country is facing multiple impending train wrecks,
and we simply do not have leadership with the willingness to make the
tough decisions necessary to address them (I don't necessarily
put all the blame for this on the Republicans):

(1) The abomination that is our health-care delivery system, coupled with
the rising number of aging baby boomers.
(2) Global warming, the energy crisis, and foreign oil dependence.
(3) The mess in the middle East, and the continuing threat of global terrorism.
(4) The social security system.
(5) Our education system, and the implications for global competitiveness,
coupled with the emergence of China and India.

That's all I can think of in 5 minutes.   Sorry if I forgot some.   I don't mean
to hijack this into a political discussion, and as I said, I don't purely blame
the party in power.

The point is, I don't blame  anyone who thinks it's foolish to have ANYTHING
in stocks.

Blah blah blah, doom and gloom.

There have always been reasons for people to want to stay in cash and not to invest in the stock market.

In 1991 people were afraid of investing because we were about to enter into a war with Iraq.

In 1989 people were afraid to invest because of the fear that the government had to bail out the S&Ls.

In 1988 people were afraid after Black Monday.

In 1987 people thought they missed the boat when the Dow hit 2000.

In 1983 people were afraid because unemployment was at 10% and banks were failing.

In 1981 people were skeptical of the future of US businesses when Chrysler needed a $400 million loan to stay in business.

In 1980 people were afraid of a war when Iran was holding US hostages.

In 1977 people were afraid of inflation killing the economy when coffee was at $5 a pound.

In 1976 people were afraid of the stock market when New York City almost went bankrupt.

In 1963 the Dow dropped 4% the day Kennedy was assassinated but recovered all losses on the very next business day.

In 1941 the market dropped 1.72% the first week following Pearl Harbor but recovered in just 5 months.

In every one of those years or any year in between, if you had invested in the stock market, you would be worth a considerable amount more today.  Invest for the long-term in the stock market and you will be rewarded.

 

[JohnEyles]

Blah blah blah, doom and gloom.

There have always been reasons for people to want to stay in cash and not to invest in the stock market.

...

In every one of those years or any year in between, if you had invested in the stock market, you would be worth a considerable amount more today.  Invest for the long-term in the stock market and you will be rewarded.

Thanks, I feel better now.

 

[dmpi]

Come'on... double digit profit. Fed rate stable or heading lower. Housing money flowing into stocks.  P/E in the 14s! Stocks ingored by the masses... These are the best time for stocks. This rally has legs....

 

[Caroline]

it was just a feeling I had while reading all of my usual news sources.

As the condemned engineer said when the guillotine malfunctioned and failed to take his head off...  "I think I see your problem."

Those news outlets have to find something to write about every single day.  Much if not all of it is short term "noise."

I used to listen to it every day, and that caused me to alter my investments more often than was prudent.  Eventually I stopped listening and guess what? My net worth didn't suffer one bit from the inattention. 

My advice, FWIW and since you asked, is to find a comfortable asset allocation given your economic expectations, set it and forget it for 6 months to a year, rebalance, and spend the time you save monitoring it to research and analyze retirement locations. 

Oh yes... when you hear Paul Kangas' melifluous tones coming out of your television set -- turn the darned thing OFF!!!! 

 

[brewer12345]

That is probably what I will end up doing, I am considering putting all of my money into  the Wellesley admiral fund.  I would say this is just the "heebie jeebies."  As I said before I don't really know the reason I did it.  I guess it was just a feeling I had while reading all of my usual news sources.  I don't think it was wise but hopefully I won't regret the decision later.

I'll go against the grain on this one. Sometimes your gut feeling is your brain trying to get your attention. The trouble is that you have to be able to separate out the idiotic panicky flight stuff that seems to spring up every so often for most of us, and the real "moment of clarity" type stuff when all the pieces come together and present you with a coherent picture. If you aren't sure which is which, yoou are probably better off just tstying invested.

 

[modlair]

Re: Markets going up / down and does it mean more buyers or sellers.

None of the above.

It means buyers were more urgent, or sellers were more urgent.

Only that. Nothing more. There have to be as many shares sold as bought. The sense of urgency present in the seller vs the buyer determines the price.

Sometimes widespread urgency can create more potential sellers (buyers) at a moment than there are buyers (sellers), but all that does is stimulate willingness among the crowd to lower (increase) their price.

In other words, assymetric urgency drives prices. Not quantity of buying or selling entites.

 

[retire@40]

Right, it's based on demand for that stock and supply of shares.

If you have more of a demand to buy that stock than to sell that stock, the price will go up.

If you have more of a demand to sell that stock than to buy that stock, the price will go down.

That's what gives a stock a fair market value, assuming all relevant and material facts are known about the company.

 

[donheff]

I'll go against the grain on this one. Sometimes your gut feeling is your brain trying to get your attention. The trouble is that you have to be able to separate out the idiotic panicky flight stuff that seems to spring up every so often for most of us, and the real "moment of clarity" type stuff when all the pieces come together and present you with a coherent picture. If you aren't sure which is which, yoou are probably better off just tstying invested.

I don't know Brewer. If you pull based on numbers or instinct you are market timing. I don't have an argument with someone who knowingly chooses to do that but if us normals "go with our gut" the warnings are that we almost always blow it. To my mind the alternatives are to allocate and stand tight knowing there may be times of scary declines (e.g 40-50%); or you just go with some sort of non-volatile income only deal with a bond ladder or the dreaded SPIA.