Withdrawal now ?

[ripper1]

Considering taking withdrawal now for next year now instead of end of year. With impasse temporarily over in Washington and another crisis looming at end of year. Thoughts anyone?

 

[W2R]

Considering taking withdrawal now for next year now instead of end of year. With impasse temporarily over in Washington and another crisis looming at end of year. Thoughts anyone?

I have no plans to do the same, because my feeble attempts at market timing have had lousy results.

In the past it seems like most of the talking heads have had equally abysmal results from their market timing predictions, even though they present political justifications for what they predict.

 

[Animorph]

Considering taking withdrawal now for next year now instead of end of year. With impasse temporarily over in Washington and another crisis looming at end of year. Thoughts anyone?

Did you have a target valuation for selling at the start of 2014? If your portfolio is already above that then you might want to sell now.

A couple of reasons, besides market timing, why you might not want to sell now: make sure the capital gains hit is OK this year compared with 2014. It might be safer to raise the cash for Roth conversions at the time you make the conversion. That way you don't raise cash for taxes now and do the actual taxable Roth conversion at the start of 2014 after equities have risen another 10%. Of course it might go the other way.

 

[panacea]

I think we'll continue to see a "crisis" of some kind every couple of months. Whether it's politics, economics, natural disasters or whatever, trying to get ahead of it simply doesn't work. The only reliable strategy is to buy more if the market goes down and sell more when the market it up.

 

[walkinwood]

I think peace of mind is as good a reason as any - if that is driving your thought process.

However, I think this crisis showed quite clearly that you it is very difficult predict what the market is going to do.

 

[donheff]

I already liquidated several months worth at the last peak in mid September. I don't generally engage in market timing (other than to watch the PE10 and start slowly shifting my AA about 5-10% when it appears to be getting out of whack). But for current expenses I do a bit of timing since it just seems to make sense to generate a few months cash when equities have jumped up a bit rather than on some arbitrary date. I doubt it makes a material difference.

 

[ducky911]

I always find Dec. to be a good month in the market....hate to miss that

 

[Onward]

Considering taking withdrawal now for next year now instead of end of year. With impasse temporarily over in Washington and another crisis looming at end of year. Thoughts anyone?

You're market timing. In doing so you will be wrong more often than you are right.

 

[Katsmeow]

I guess it depends on where your asset allocation is.

I actually did move some money from equities into my short term bond fund (which is where I keep most of the money I will need over the next year or so). However, I did it because I rebalance when my asset allocation is off 5% either way.

 

[target2019]

Considering taking withdrawal now for next year now instead of end of year. With impasse temporarily over in Washington and another crisis looming at end of year. Thoughts anyone?

Look at the difference one day makes. It could have gone down, but it went up.

If I needed to begin building more cash for next year, I would make a tactical move of some kind now. Maybe break it down into 2 or 3 moves.

 

[donheff]

Look at the difference one day makes. It could have gone down, but it went up.

If I needed to begin building more cash for next year, I would make a tactical move of some kind now. Maybe break it down into 2 or 3 moves.

I'm kinda here. I already took out a few months cash in September at essentially the same level so I count that as pulling some money yesterday. If the market continues to rise I will probably pull a few more in mid December if positive budget talk announcements kick a jump or wait if the reverse happens. Yeah, this is timing but I have to get my cash out somehow. Big announcement driven movements one way or the other are often obvious during the late day permitting "safe" mutual fund withdrawals. What will happen the next day are not obvious at all. So when I am already waiting to make a withdrawal I try to pick my days late in the afternoon following upward trends and, particularly, following 1% jumps after a positive announcements.

 

[karluk]

Considering taking withdrawal now for next year now instead of end of year. With impasse temporarily over in Washington and another crisis looming at end of year. Thoughts anyone?

I would certainly never try to discourage anyone from playing safe with the money they will need in the near future, so immediately putting your expenses for next year into a cash account is quite reasonable.

The thing that bothers me though, is your rationalization for doing so. It seems to me that you could make as good or better a rationalization for withdrawing money from your investments if the gridlock in Washington had ended badly. If that had happened, the U.S. would now be facing default and investors would probably be in a state of panic. Surely that's the right time to play safe and not risk a big decline before year's end.

When you have an equally good argument for immediately putting next year's expenses in cash regardless of what happens in Washington (or elsewhere), then I think it's a good idea for you to ponder whether you shouldn't have a larger cash cushion at all times, instead of needing to replenish your cash bucket at the beginning of the year, when you don't know if the market is going to be up or down.