401 K took a beating!

[doitmyself]

Goodness, just last week everyone was basking in their 20%+ gains and now "everyone" is prepping their bomb shelters. I learned in high school economics class way back in 1973 that our economy is based on having correction cycles every so often. I'm actually glad that it might be happening now because I might retire in 3 or 4 years. I already started adjusting my portfolio for retirement. It took about a year for my 403B to recoup after the 2008 crash, and unlike today the economy back then was in the toilet.

Sit tight. Don't panic. Ride the wave. Don't worry, be happy!

 

[cashmoney]

Interesting to read all the genius investors posting how they successfully timed the market. Hope they realize they don't need to work a job for a living since they appear to be able to accurately predict market direction and timing. Sorry but I call BS. Study after study has been published that show market timers have significantly worse investment results than buy and hold investors. In fact trading frequency is directly tied to worse results.

Long term buy and hold dollar cost averaging investing, not panic selling or thinking you are smart enough to time the normal up and down market cycles, is what produces consistent good results. Positive investment results requires time in the market not timing the market.

 

[A_Harman]

Normal investment advice is to start pulling out of stocks (or other securities subject to volatility) 5 years from retirement. I'm not there yet.

 

[WyrTwister]

Originally Posted by P10crew
High risk - all 3 funds
Now I just watched on fox that all or most of our antibiotics are made in China. What the [censored] how dammed dumb are we?



Pretty dumb !

But , I did not think antibiotics worked on viruses ?

 

[Pew]

I just checked mine, YTD loss of 8%. Do I just leave my 401k in and ride out the storm? I'm still pretty young so my 401K isn't super established right now.

 

[pbm]

Originally Posted by WyrTwister
Originally Posted by P10crew
High risk - all 3 funds
Now I just watched on fox that all or most of our antibiotics are made in China. What the [censored] how dammed dumb are we?



Pretty dumb !

But , I did not think antibiotics worked on viruses ?

The face masks that people want are also almost entirely made in China....the elected people who stood by (and often profited) from such outsourcing (to a single country ...no less one who is adversarial to us) should be held accountable. PS: If this comment is deemed 'political' please delete it and not the entire thread.

 

[PimTac]

Originally Posted by Pew
I just checked mine, YTD loss of 8%. Do I just leave my 401k in and ride out the storm? I'm still pretty young so my 401K isn't super established right now.




If you are young then stay the course. As the markets drop you are buying more shares at lower prices.

 

[JohnG]

Quote
I just checked mine, YTD loss of 8%. Do I just leave my 401k in and ride out the storm? I'm still pretty young so my 401K isn't super established right now.


You absolutely leave it alone. You'll only lose money if you sell.

I've been down this road about 4 times in my career, it all worked out in the end. Come retirement time at 60, bought bonds, Annuities, and Dividend stocks. I won't be concerned until companies start cutting dividends.

 

[Dwight_Frye]

You haven't lost or gained any money until the day you sell. I suspect that the Corona virus situation will be over shortly and the market will come roaring back.
I also think that Tesla will have another run up after the battery investor day in April. I'm not worried, I'll sit this one out for a while before I even think of panicking.

 

[Mr Nice]

Originally Posted by JHZR2
It's interesting to watch. Correction is healthy - some will lose out but the market will keep balance to some extent.

Its hard to see large sums of money disappear.

It's harder to time the market.

Older folks may have good rationale to rebaseline allocations, but even retired folks should keep an appropriate amount of risk.

For most this is a buying opportunity. Some will make money by trading even. If the knife is still falling, so be it, those dollar cost, div reinvesting, etc should get efficiencies along the path.

^^^^
Exactly. ðŸ‘

 

[ZZman]

I think the market has been overheated for a while and needed a pull back.

 

[ZZman]

Maybe lack of super cheap money and slowing stock buybacks will cool the markets.

 

[JOD]

Originally Posted by cashmoney
Interesting to read all the genius investors posting how they successfully timed the market. Hope they realize they don't need to work a job for a living since they appear to be able to accurately predict market direction and timing. Sorry but I call BS. Study after study has been published that show market timers have significantly worse investment results than buy and hold investors. In fact trading frequency is directly tied to worse results.

Long term buy and hold dollar cost averaging investing, not panic selling or thinking you are smart enough to time the normal up and down market cycles, is what produces consistent good results. Positive investment results requires time in the market not timing the market.


well, I for one am not a genius investor, I was just sorta lucky. If I were a genius, I would have pulled out at the peak--I pulled everything out about 1.5% below the peak...

Sorry, but it's not rocket surgery to look at the overwhelming indicators that we were headed for a huge correction. It was a matter of "when", not "if". Corona virus was just the pin in the balloon.

In the aggregate you're right.--but just because most people don't time the market correctly, doesn't mean it can't be done. I'll be eligible to draw on it in 10 years, so for me this was an easy decision. "Buy and hold" through this would have been been ugly, so yeah, I'm glad I "outsmarted" the market. Keep in mind, this is the first time I changed the allocations in over 10 years. I'm generally a "buy and hold" investor, but it's insane to believe this wouldn't end.

 

[Pew]

Originally Posted by JohnG

You absolutely leave it alone. You'll only lose money if you sell.

I've been down this road about 4 times in my career, it all worked out in the end. Come retirement time at 60, bought bonds, Annuities, and Dividend stocks. I won't be concerned until companies start cutting dividends.


Originally Posted by PimTac
If you are young then stay the course. As the markets drop you are buying more shares at lower prices.


Thanks gents. This makes me wonder, if/when the market crashes, the shares would be low. Maybe it's a good time to buy the shares that I can afford and dabble around in the market? Maybe I can learn a thing or two while the market is down and mistakes don't hurt as much.

 

[PimTac]

Originally Posted by Pew
Originally Posted by JohnG

You absolutely leave it alone. You'll only lose money if you sell.

I've been down this road about 4 times in my career, it all worked out in the end. Come retirement time at 60, bought bonds, Annuities, and Dividend stocks. I won't be concerned until companies start cutting dividends.


Originally Posted by PimTac
If you are young then stay the course. As the markets drop you are buying more shares at lower prices.


Thanks gents. This makes me wonder, if/when the market crashes, the shares would be low. Maybe it's a good time to buy the shares that I can afford and dabble around in the market? Maybe I can learn a thing or two while the market is down and mistakes don't hurt as much.




Education is key. Learn about the markets. Also, make sure your financial spending and budget are under control. Spending less on frivolous stuff means more $$ for investing.

I also tell people to check their tax withholding. That's timely right now. If you are getting big refunds each year then stop. You are loaning your money to the government and they give it back to you. That money can instead be working for you. Redo your withholding so that you come close to break even. $200-300 either way is fine. A $2000 refund means that $160 a month could be put into your retirement funds.

Frugality gets a bad rap from most people but it really means you are building financial discipline.


With all that said, I am not a financial professional. I'm just a average guy who started investing in the mid 80's and kept to it. Time and discipline are key.

 

[cashmoney]

Originally Posted by Pew
Originally Posted by JohnG

You absolutely leave it alone. You'll only lose money if you sell.

I've been down this road about 4 times in my career, it all worked out in the end. Come retirement time at 60, bought bonds, Annuities, and Dividend stocks. I won't be concerned until companies start cutting dividends.


Originally Posted by PimTac
If you are young then stay the course. As the markets drop you are buying more shares at lower prices.


Thanks gents. This makes me wonder, if/when the market crashes, the shares would be low. Maybe it's a good time to buy the shares that I can afford and dabble around in the market? Maybe I can learn a thing or two while the market is down and mistakes don't hurt as much.



Anyone that says they know what direction the market will go in the short run, like for intervals of anything less than a year, is either deluded or a liar

The market experiences intermittent economic ups and downs but its long term trend in the last 100 years has been up.

Despite the BS from those that claim they "knew" it was gonna crash "this time", the reality is that nobody knows nothing. And there are no guarantees - the market could stay down from this day for the next 10 years, or it could go straight up tomorrow for the next 10 years. If you want to be an investor instead of a gambler, and be successful at it, invest for the long term and buy in regularly and without fail over a long period of time.

 

[Wolf359]

Originally Posted by cashmoney
Interesting to read all the genius investors posting how they successfully timed the market. Hope they realize they don't need to work a job for a living since they appear to be able to accurately predict market direction and timing. Sorry but I call BS. Study after study has been published that show market timers have significantly worse investment results than buy and hold investors. In fact trading frequency is directly tied to worse results.

Long term buy and hold dollar cost averaging investing, not panic selling or thinking you are smart enough to time the normal up and down market cycles, is what produces consistent good results. Positive investment results requires time in the market not timing the market.


The basic analysis is that while some people pick the right time to get out of the market, they don't pick the right time to get back in. And there are always people claiming the market is over valued. I had a friend who got out over 2 years ago and missed out on a lot of the increases from last year. Basically you need to make two calls right, the one to get out and the one to get in. If you miss one or two, you will lose over the long term. Most people can't do it. There are probably lots of people who get out all the time. The ones who happen to get out at the right time could just be based on luck, and they don't have the right amount of luck both times.

 

[Wolf359]

Originally Posted by Pew
Thanks gents. This makes me wonder, if/when the market crashes, the shares would be low. Maybe it's a good time to buy the shares that I can afford and dabble around in the market? Maybe I can learn a thing or two while the market is down and mistakes don't hurt as much.


As the saying goes, bulls make money, bears make money, pigs get slaughtered.

High volatility means you can make a lot or lose a lot.

Originally Posted by WyrTwister
Originally Posted by P10crew
Now I just watched on fox that all or most of our antibiotics are made in China. What the [censored] how dammed dumb are we?

Pretty dumb !
But , I did not think antibiotics worked on viruses ?


I think he probably means medical supplies or the supply chain in general. Just goes to show how vulnerable things can be when you have too much invested in one country. Basically it's singe point of failure. Not too many choices out there, Having a single factory is going to have a lower unit cost than have two or having one in the US.

 

[csandste]

I got a fair (for me) amount of money into cash in late '18 and it certainly tempered my gains last year. Happy for all those who "timed the market" in January, just as I'm happy for someone who wins $10,000 on a scratch game at the Circle K, but I don't believe that anyone can predict every turn. I remember coming home after an early morning meeting in 2008 and finding I'd lost about thirty grand since the night before--and I was a couple of years from retirement. I didn't panic and it all came back, although I'm gotten more conservative in my retirement I still have a fair amount of money in the market.

Although I'm largely in index funds and ETF's, I'm a bit leery of their ability to protect in a down market. When others get out they have to sell since they by nature don't have a lot of cash sitting around to cover things. In the meantime I'm not looking at my accounts. Why panic myself in old age? Been through '88, been through the early 2000's, been through '08. The market was frothy anyway. The gains and losses are all on paper until you cash in.

 

[MarkM66]

Yep. Time to buy.