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

[redduck]

.

Ray, instead of market-timing when you get nervous, perhaps you can just tuck yourself in under your blanket.

[CaptTom]

Quote:

Originally Posted by Dawg52 Ohhhh you will get a lot of backlash here for doing that. Market timing, not keeping up with inflation and all the rest.

Call it market timing, but it makes perfect sense to me. If you've enjoyed the ride up, and have more now than you planned and hoped for, why not take your gains and sit out the next hand?

Or, to put it another way, it sounds to me like the OP has won the game and decided not to play anymore.

I'm not there yet (still more greed than fear) but I can relate. And I did use the excuse of taking out some of my unexpected gains when I rebalanced recently to be a little more conservative.

[street]

Quote:

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.

Well , I won't live another 50 years but hope to have 30 to 35. I see no need to sell stocks now or anytime if you don't need the money. If you need it to live then that is a horse of a different color.

Each one has their own risk levels and that is great and should do what they feel is right for them.

[W2R]

[CRABBY OLD LADY]
We all know how to make money in either an "up" market, or a "down" market. Remember those "blue light specials" back in 2008? Some of our members made a killing. If the market crashes again, most of us will end up wealthier than if it didn't.

In 2008, I truly felt absolutely terrible for those who were posting that they had lost everything, had to go back to work, were selling low, and so on. It really affected me, to the point of losing sleep worrying about all of us. But I wonder - - perhaps if we had another crash now, I'd be not only less worried, but also less sympathetic.

C'mon, members, we already learned those hard lessons and we know what to do and what not to do. There is absolutely no reason to sell everything today and miss out on part of the market surge, or to sell everything low later on and lock in your losses. Just go play golf or something and things will all work out in the long run.
[/CRABBY OLD LADY]

[jollystomper]

I don't have any problem with rayinpenn's choice. I have thought about it with my 401K. I have the luxury of having a stable value fund in it that has never returned less than 3%. With a projected SWR of around 2.5%, moving my entire 401K to that would generate 70% of our SWR (and over 100% of it once SS starts in 3-5 years). The interest and dividends from my non-401K investments would cover the balance of the SWR before SS. So I can understand the temptation of stepping out of the market.

[Texas Proud]

Quote:

Originally Posted by CaptTom Call it market timing, but it makes perfect sense to me. If you've enjoyed the ride up, and have more now than you planned and hoped for, why not take your gains and sit out the next hand? Or, to put it another way, it sounds to me like the OP has won the game and decided not to play anymore. I'm not there yet (still more greed than fear) but I can relate. And I did use the excuse of taking out some of my unexpected gains when I rebalanced recently to be a little more conservative.

Since his post did not say anything like this, I will go with market timing...

You do have a point though and I would agree with anybody doing what you said if they have 'won'....

[43210]

Quote:

Originally Posted by rayinpenn I don’t believe in trying to time the Market and I’ll probably miss gains but the unfounded ‘Market Exuberance’ got hold of me; Yesterday I sold all my 401k equity funds (S&P, Large Cap, International).

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.)

Is this true? I'm annoyed to read this far, only to find it's much ado about nothing.

[Midpack]

Quote:

Originally Posted by marko "Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in corrections themselves." Peter Lynch.

+1000.

If you just stayed the course in 1987, 2000 and 2008-2009, you did very well. If that doesn’t discredit market timing, I don’t know what will.

Optional: If you want good returns, the market has to make new highs over and over, periodic pullbacks are part of the drill and have been for 140+ years (US). Every time people have said “this time is different,” they’ve been wrong every single time for 140+ years. When I see folks post about being nervous about new highs, I always scratch my head...

Getting out is easy, getting back in before you’ve missed the train is where people go wrong. I suspect few of us can cite an example of anyone you know who’s timed out and back in well once, much less more than once. Even the occasional pro who seems to have been prescient never fails to miss the next downturn, remember Elaine Garzarelli? Everyone I know who has panic sold at a high, high P/E or on the way down, got creamed trying to get back in, not to mention the tax losses and commissions.

Unless you’re never going back to equities - if you’re thinking about bailing, just think long and hard about how you’ll get back in FIRST.

[easysurfer]

A good market crash separates those who are true buy and hold investors vs those who think they are .

[Mdlerth]

Quote:

Originally Posted by Ready I do worry about how much the market has run up and the inevitable correction

I see this sentiment here a lot, and it begs the question: Would we all feel better if the market had spent the past year or two just running in place and going nowhere? (FWIW, DJIA hovered around 16,000 in Jan 2016).

[gayl]

Right now I'm trying to build cash for bargain hunting by accumulating SPY dividends (average purchase price = 142). And I won't sell

[rayinpenn]

Quote:

Originally Posted by CaptTom Call it market timing, but it makes perfect sense to me. If you've enjoyed the ride up, and have more now than you planned and hoped for, why not take your gains and sit out the next hand? Or, to put it another way, it sounds to me like the OP has won the game and decided not to play anymore. I'm not there yet (still more greed than fear) but I can relate. And I did use the excuse of taking out some of my unexpected gains when I rebalanced recently to be a little more conservative.

Ok let me add some details..
What I sold was roughly 25% of my portfolio..
Roughly 12% was already in cash like instruments..
Another 12% is locked in to company stock until February.
Another 12% will be sold on Monday

The remaining funds are in taxable accounts so any sales would be appreciated by Uncle Sam but not by me.

- A modest 3% yield on the portfolio is more money then the Mrs and I have ever spent. We are LBYM, have no debt, are very careful but I’m sure we’re aren’t cheap.
- the daughter is nearly financial independent
- the son has 3 more years of college and is covered
- I’m still working 4 days a week and it covers our expenses.

This is the second time I’ve done this. The first time was just before my firms stock dropped 75% in a market crash. Too many of my senior colleagues were loaded up on company stock and they were vaporized.

Luck you say? I don’t know but, I as you’d expect from a guy with an MBA and an MS in tax I have my nose in the WSJ and all things financial. Maybe it is just for me my feeling that “Pigs get roasted” keeps ringing in my ears. I’m not burying my silver coins in the backyard I’m just taking them out of the market...

Funny as I write this the wind is howling outside and over the next couple days we are expecting the lowest temperatures in a generation. Thank god I have my blanket.

[38Chevy454]

A correction may happen but I always say that the correction is only a loss once you sell and lock it in. Have a diversified allocation mix so you don’t have to sell low, and you can then smile when the change in direction occurs back to growth.

[Islandtraveler]

To me, trying to time the market is like running to the other side of the ship each time it moves. A lot of work with little to show for it. If the market doesn’t get you, capital gains will. Stick an umbrella in your drink and grab a chase lounge.

[LOL!]

So you were 12% cash and 88% equities before selling 25% of portfolio? If so, I would say you were market timing before selling the assets in your 401(k). Good on you!

[Sunset]

Quote:

Originally Posted by W2R [CRABBY OLD LADY] We all know how to make money in either an "up" market, or a "down" market. Remember those "blue light specials" back in 2008? Some of our members made a killing. If the market crashes again, most of us will end up wealthier than if it didn't............ [/CRABBY OLD LADY]

What is a "blue light specials" , as I wasn't around in 2008. Which also suggests there will always be fresh meat for the grinder..

[W2R]

Quote:

Originally Posted by Sunset What is a "blue light specials" , as I wasn't around in 2008. Which also suggests there will always be fresh meat for the grinder..

The "blue light specials" were when stocks plummeted downwards in share price (due to the crash), so you could buy them cheaply, as though they were essentially on sale!

We called this a blue light special, after the ones at K-Mart where they have a low sales price on something for a few minutes, and flash a blue light in that aisle to let everyone know.

[dixonge]

"An investor who stashed $10,000 in a portfolio tracking the Dow Jones Industrial Average at the end of 2001 and held on would have had $28,698 by the end of 2016, for a total return of 7.28 percent annualized, according to Putnam Investments. By missing out only on the Dow's 10 best days during that period, the investor would have ended up with just $14,697, for a total return of 2.60 percent annualized."

Some great charts here

Full article here

But missing the *worst* days would offset that nicely...

https://www.ifa.com/12steps/step4/mi...nd_worst_days/

Now - just get out before the worst days and get in before the best days. Easy peasy...

[REWahoo]

Quote:

Originally Posted by dixonge ... get out before the worst days and get in before the best days...

Looks like you've identified the perfect market timing system.

[Chuckanut]

Today’s WSJ has an article on how plenty of people have sold stocks over the past 5 years as they have gone higher and higher. People just got nervous. Stock ownership as a percent of population is going down.

https://www.wsj.com/articles/as-dow-...out-1515099703

The article is behind a paywall so here are a few relevant (to me) quotes:

Quote:

U.S. stock funds in aggregate have suffered outflows in each of the past three years, according to trade group Investment Company Institute, a sign of mounting skepticism about the stock market’s steep climb.

Quote:

he dipped his toes into investing shortly after college. After taking advice from CNBC, he said he invested small sums in bank stocks in 2007 and 2008, watching his small investment shrink during the ensuing crisis. “It was a good learning experience,” he said. “Now I’ll invest only in things I understand. Quote: I’m 10 years from retirement, so I’m being more cautious,” said Jeffrey Lee Schantz, a 58-year-old architect in Boston, who has put what he considers to be his nest egg into “very conservative investments,” including fixed-income funds. Quote: The most dedicated buyer of U.S. shares has been the companies themselves. Corporate stock buybacks started ramping in 2009, hitting a record of $572 billion in 2015, before leveling off, according to data from S&P Dow Jones Indices.