Survivalist Forum banner

1 - 20 of 29 Posts

·
Registered
Joined
·
2,353 Posts
Discussion Starter #1
I’m pretty investment illiterate. I have a 401k account with a major investment firm. It is invested in a 2030 fund meaning I intend to retire around 2030.

It’s done pretty well over the last 20 years and this year despite Covid but my gut feeling is that with the Dems taking over, the market is going to go down.

Im seriously considering taking the majority of my money and moving it into a lower risk investment - maybe the 2025 fund or just the safest fund they offer. I’ve never done this before- I’ve always just left it ride in the fund. But I’ve never before seen the crazy I’m seeing today.

Thoughts?
 

·
Registered
Joined
·
2,407 Posts
Call who ever your 401k is with and ask to move it to a more conservative investment group. You should be able to pick out of 20 different options. Usually there is the super low risk option which includes treasury bonds. Your returns will be crap but your loses should be next to none. Might be smart to do if you are that close to retirement.
 

·
Registered
Joined
·
5,811 Posts
If interest rates go up the value of existing lower producing bonds goes down, significantly. Works the other way, too. If interest rates go down the existing bonds are worth more. However a lot of bonds are callable so they are called back and refinanced at the new lower rate so you don't get the huge benefit.
 

·
Registered
Joined
·
2,353 Posts
Discussion Starter #5
I’ve always heard you aren’t supposed to try to “time the market” and I’ve always had the nerve to just let the money ride. But today with all the things going on it just feels like now is the time to seek more safety.
 

·
Registered
Joined
·
5,595 Posts
I time the market alot. Listen to your gut feel you mentioned.....thats your subconscious poking your conscious mind. Its noticed something the distracted level overlooked.

I timed the dot.com, the 08, almost missed 16, timed both blips this Spring and this latest run-up. I always park it out of the market in the bonds, 2020, now 2025. Thats how I made my 401k as big as it is, and thats not all that big but it gives me more in retirement than working does. Tried to tell my co-workers, some listened, most drank the koolaid and lost big.

Timing too close is dangerous. I'm not that greedy. I know daytraders. A couple friends like that but they dont risk the nestegg, just some side funds.
 

·
statists' be statin'
Joined
·
3,371 Posts
If you're in a retirement fund that matures in 2030, that fund is already set up to reduce risk for you as you get closer to retirement. Every year, some of the stocks are being sold and bonds are being purchased. Your potential gains are going to be less as you get closer to the end date but your potential losses will also be reduced.

The market goes up and the market goes down. If you have 20 years left, you have plenty of time to recover from a dip in the market. With 10 years left, you probably also have time to recover if something bad happens but it's not as certain. The closer you get, to the end, the harder it will be to recover if the market tanks. You don't want that to happen in your last year. Your find already has this figured out.

I would request a prospectus on the fund and read it. I suspect what you are considering is already being done within that fund.
 

·
Registered
Joined
·
685 Posts
If your still contributing to the 401k you could earmark it to a more conservative fund and leave the 2030 where its at.
The 2030 is probably getting you around 11+% this year and averaging around 6.5-7% in the last 5 yr run.
Another factor is how much will you need from it in retirement, would you need some right away or could you afford to let it recover before withdrawing.
 

·
Registered
Joined
·
8,099 Posts
I’m pretty investment illiterate. I have a 401k account with a major investment firm. It is invested in a 2030 fund meaning I intend to retire around 2030.

It’s done pretty well over the last 20 years and this year despite Covid but my gut feeling is that with the Dems taking over, the market is going to go down.

Im seriously considering taking the majority of my money and moving it into a lower risk investment - maybe the 2025 fund or just the safest fund they offer. I’ve never done this before- I’ve always just left it ride in the fund. But I’ve never before seen the crazy I’m seeing today.

Thoughts?
you are reacting emotionally and that is always bad in investing. Historically speaking the market has done fine under dems.

The reality is the govt doesnt do that much to hurt the market. Most of the dems are actually centrists.
 

·
Registered
Joined
·
8,099 Posts
I recall thinking just before each of the last three downturns how great everything was going, especially the stock market. If you're getting that feeling, maybe you should listen to it.
by definition things are fine before a crash. Otherwise it wouldnt be a crash.

It is stupid to try and time the market. The vast majority of people will lose money doing so.
 

·
Registered
Joined
·
4,333 Posts
I wish somebody would explain what "timing the mrket" means.
If the market seems low this morning and I buy
then sell this afternoon when it seems high
that would be timing the market?
So, if I buy today when it seems low and
sell a year from now when it seems high
is that NOT timing the market?
 

·
Registered
Joined
·
2,497 Posts
I wish somebody would explain what "timing the mrket" means.
If the market seems low this morning and I buy
then sell this afternoon when it seems high
that would be timing the market?
So, if I buy today when it seems low and
sell a year from now when it seems high
is that NOT timing the market?
 

·
Registered
Joined
·
2,614 Posts
Timing The Market is a strategy commonly used by professional traders that is not useful for the public.
^^^ This ^^^

Keep in mind that Professionals do this day-in and day-out and have access to information that you don't have (not necessarily inside information just a team of analysts working for them that have access to financial models you don't have access to).

If your 'gut' feels strongly about it, then listen. If its just worries manifested by media, then I would hold tight.

You should also consider other investment options as well to spread out your portfolio (real estate, etc.)
 

·
Registered
Joined
·
8,099 Posts
I wish somebody would explain what "timing the mrket" means.
If the market seems low this morning and I buy
then sell this afternoon when it seems high
that would be timing the market?
So, if I buy today when it seems low and
sell a year from now when it seems high
is that NOT timing the market?
yes that is timing the market. If you replace "seems high" and "seems low" with something else, like the stock is overpriced because the earnings are to low relative to the price, now you are talking fundamentals.

Most people dont have the capability to actually analyze fundamentals for a given equity. Analyzing fundamentals for a basket of stocks (like an ETF or the market as a whole) is out of the realm of most people. Where regular people have a huge advantage over professionals is that we dont need to worry about quarterly performance. Funds and professionals have to prove themselves every quarter which means they are trading in the short term.
 

·
statists' be statin'
Joined
·
3,371 Posts
^^^ This ^^^

Keep in mind that Professionals do this day-in and day-out and have access to information that you don't have (not necessarily inside information just a team of analysts working for them that have access to financial models you don't have access to)...
And still, funds that are actively managed by these professionals do not perform as well as index funds.
 

·
Social Deserter
Joined
·
431 Posts
Let it ride. You may get lucky a couple times in life and avoid getting burned by a drop but you will miss just as many jumps getting your funds back in the market too late. It’s better to just ride out the drops and throw MORE money at it when it does end up falling.
Also, remember that you don’t want to be at zero risk at or even shortly after retirement. Most people need to still be making significant gains well into retirement to have enough to get to the ends comfortably.
 

·
Registered
Joined
·
883 Posts
Those 2020, 2030 funds are terrible as they get more conservative as they get close so keeping you earning a good return. Should also keep investing with good returns in mind. Even in a bad year you will have more good years to overwhelmingly make it up and do very well over long term.
The idea is to keep making money so you only use the earnings and principal stays in to keep earning
 

·
Registered
Joined
·
53 Posts
Stocks are just going to go up. Same with precious metals, commodities, etc. We're going to start seeing a lot of devaluation of the dollar with our national debt being so high. Treasury Bonds are going to be losers, never outpacing inflation.
 
1 - 20 of 29 Posts
Top