Originally Posted By: doitmyself
Originally Posted By: PandaBear
Move all of my and my wife's 401k out of stock funds and into money market and cash equivalent (Fidelity stable whatever since they don't have money market).
I am rather naive about this stuff and have my retirement funds with a well diversified TIAA-CREFF plan. I review and make minor changes at least twice a year.
Tell me if I am wrong about Panda Bear's move. I was under the assumption that if you have many years to go before retirement, it is better to let your stock portion sit in the stocks (assuming not ALL your investment is there) during these times. In simple terms, during these times you will accumulate more stock shares during the lows, then when it goes back up, you will have higher gains.
Correct, more or less? Of course there are lots of variables and my scenario is for when some of your funds are also in safer areas (diversified). Comments?
A man's gotta do what a man's gotta do. If Panda thought the market was going to crash, then he's out and relatively safer. OTOH, have you checked what money market, etc accounts earn? I don't call 0.05% return on my hard earned money safe at all. That said, look at my earlier posts. At any given moment with the market not in an uptrend, I have upwards of 80% money in cash - and frankly my gut churns more in those cases, than when I'm 80% in some form of investment when the market is rallying. Right now I'm somewhere in between, point being I am beating interest paying accounts and the market.
No you can't always beat the market, but you can follow ride the herd with market leaders and know to get out when your picked leaders are off 7-8%. This is the best, easiest and toughest of all investment rules. But you just must know the statistics are with you. If any stock is down 8% from your purchase price, sell it. Don't ride it, don't double down, don't wait. Sell it and learn what was wrong with your choice. A related rule, buy more on the way up. Ah such a tough thing to do.............