Originally Posted By: WillsYoda
Originally Posted By: supton
Appreciate any comments? Mine would be to pick a target fund and forget about it. I'm not versed at all at stock stuff, so that's my comment.
I was recommended to go over to bogleheads forum for financial stuff. You might want to surf over there.
I agree. Bogleheads.org is the perfect place for the Original Poster. Put your 401k 100% in the cheapest index mutual funds (e.g.,
Vanguard Total Market or an S&P500 Fund) and just ignore it until you retire. Don't touch it. People who buy and sell lose money.
Here is a good article on this from the NYTimes...
http://www.nytimes.com/2015/08/25/upshot/how-emotion-hurts-stock-returns.html
I like the opening quote: “As investors watched global stock markets tumble, the behavioral economist Richard Thaler, who is also an occasional contributor to The New York Times, offered the following advice: “Inhale, exhale. Repeat. Then watch ESPN.”
Watching ESPN is far better than messing with one's investments during market turbulence.
One study found that the best investment returns were from accounts of dead people or people who had forgotten they had an account. Dead! The idea is that the less one messes with one's investments, the better...
http://www.businessinsider.com/forgetful-investors-performed-best-2014-9
http://theconservativeincomeinvestor.com/2015/05/26/fidelitys-best-investors-are-dead/
And this chart is telling. The average investor does very badly when they mess with their accounts...
http://www.businessinsider.com/typical-investor-returns-20-years-2014-8
The chart shows that people tend to buy high (when stocks are popular or rising) and sell low (when they are less popular or dropping).
Don't buy high and sell low. Just buy and hold, and stay the course. Ignore the ups and downs. When a fund falls, that is often the best time to hold it, since it is more likely to go up in the long term.
Go to Bogleheads.org for more information or advice. They are very helpful.
Yoda is right - just pick a couple of Vanguard funds (they're cheap) and let it ride. 50-50 in VT and VOO and you'll do fine. You could add in 10% VNQ and 10% VWO for more diversity. I have the feeling the Dow will get back below 16500, that will be a good time to get back in. That being said, I also feel the market will be mostly sideways from here in 2016 - maybe a 5% upside. We're all just guessing. If Hillary, Cruz or Trump get in, defense stocks should do well so you can also add in some ITA - one of my favs.