What's the right thing to do with 401 savings?

[Feckweed]

Originally Posted by spartan_in_mpls

Hey Sherlock, IF you had bailed this market in April, and reinstate your investments tomorrow exactly as they were when you had bailed, would you be better or worse off?

Let me help you out here. If I sold a stock at 30 and repurchased at 10, would I be better off than if I had ridden it down to 10??

Geniuses I tell you..geniuses. Im not saying you'll do this successfully consistently but I know alot who did bail in April and they are leagues ahead of those who hung on.

So go ahead and tell us when to get back in the market, genius, because they aren't leagues ahead of anybody until they've gotten back into it at its low.
any idiot can come onto a message board in hindsight and say they beat the market, doesn't make it true

[chachi]

spartan in mlps...

Join the trading thread. All real.. all the time.

[tTy]

I bailed on stocks in my 401 on 11/16/07 (just looked it up as a matter of fact), and just a few hours ago went back all in, nearly a year later. We hit the bottom today at about 3pm. Up from here, it's a no brainer. Don't bail now man, you'll regret it for a long, long time.

[Vlad_the_Impaler]

Originally Posted by spartan_in_mpls

Hey Sherlock, IF you had bailed this market in April, and reinstate your investments tomorrow exactly as they were when you had bailed, would you be better or worse off?

Let me help you out here. If I sold a stock at 30 and repurchased at 10, would I be better off than if I had ridden it down to 10??

Hindsight is a great thing isn't it? So what you're saying is that investors should have known when to jump off and when to jump back in? When the stock was at 30 (already down from maybe 50), people should have known that it was going to go to 10, huh?

Hmm, I guess I'm just not that good.

And once at 10, people should have known that it won't go down to 3? Wow, you're good man!

[Golfnut]

bail, bail, bail. get ALL of your money out as soon as possible. the free market will take care of itself.

[DITKA ®]

Originally Posted by spartan_in_mpls

Hey Sherlock, IF you had bailed this market in April, and reinstate your investments tomorrow exactly as they were when you had bailed, would you be better or worse off?

Let me help you out here. If I sold a stock at 30 and repurchased at 10, would I be better off than if I had ridden it down to 10??

Geniuses I tell you..geniuses. Im not saying you'll do this successfully consistently but I know alot who did bail in April and they are leagues ahead of those who hung on.

Do you know how to read? Seriously, refuse to argue with Simpletons. And only at the RCMB can you find the sparan_in_mpls and his plenty of people he knows that timed the market to the 'T'.

[DITKA ®]

Originally Posted by Vlad_the_Impaler

Hindsight is a great thing isn't it? So what you're saying is that investors should have known when to jump off and when to jump back in? When the stock was at 30 (already down from maybe 50), people should have known that it was going to go to 10, huh?

Hmm, I guess I'm just not that good.

And once at 10, people should have known that it won't go down to 3? Wow, you're good man!

Dude sounds exactly like a person that has no money in the stock market. Thinks its that freaking easy.

[spartan_in_mpls]

Originally Posted by Feckweed

So go ahead and tell us when to get back in the market, genius, because they aren't leagues ahead of anybody until they've gotten back into it at its low.
any idiot can come onto a message board in hindsight and say they beat the market, doesn't make it true

Wow..the level of idiocy here staggers me.

I never claimed to be able to time the market. I think most invariably fail when trying to do so. The original post used a chart suggesting that bailing the market never works because look at what happens if you miss the 5 best months or days or whatever in the market. My only point was that those charts never seem to show (if you were lucky enough) to miss market downside how much better off you would be. Now some of you may say..oh thats impossible you'll never time downside correctly, and to that I say I know plenty of people who reached their emotional breaking point in April and IF they get back in now will be better of than if they had stayed in all along. Simple math really..jeez! I left the market in April, didnt absorb downside from April until now and IF I get back in now, I will be better off than if I had stayed in.

Sheesh!

[Vlad_the_Impaler]

Originally Posted by spartan_in_mpls

I left the market in April, didnt absorb downside from April until now and IF I get back in now, I will be better off than if I had stayed in.

I hear all that, but it goes against most "expert" advice you hear now days, that don't try to time the market...stay the course...keep buying low...stocks are on sale...you don't need the money right now anyway...etc, etc.

[SBSpartan]

Originally Posted by spartan_in_mpls

Wow..the level of idiocy here staggers me.

I never claimed to be able to time the market. I think most invariably fail when trying to do so. The original post used a chart suggesting that bailing the market never works because look at what happens if you miss the 5 best months or days or whatever in the market. My only point was that those charts never seem to show (if you were lucky enough) to miss market downside how much better off you would be. Now some of you may say..oh thats impossible you'll never time downside correctly, and to that I say I know plenty of people who reached their emotional breaking point in April and IF they get back in now will be better of than if they had stayed in all along. Simple math really..jeez! I left the market in April, didnt absorb downside from April until now and IF I get back in now, I will be better off than if I had stayed in.

Sheesh!

If you have 25-30 years left to invest and gather SHARES in your 401K why not just let it sit and buy up a bunch of cheap shares? Why would you stop investing?

401K is long term my man.

[Feckweed]

Originally Posted by spartan_in_mpls

Wow..the level of idiocy here staggers me.

I never claimed to be able to time the market. I think most invariably fail when trying to do so. The original post used a chart suggesting that bailing the market never works because look at what happens if you miss the 5 best months or days or whatever in the market. My only point was that those charts never seem to show (if you were lucky enough) to miss market downside how much better off you would be. Now some of you may say..oh thats impossible you'll never time downside correctly, and to that I say I know plenty of people who reached their emotional breaking point in April and IF they get back in now will be better of than if they had stayed in all along. Simple math really..jeez! I left the market in April, didnt absorb downside from April until now and IF I get back in now, I will be better off than if I had stayed in.

Sheesh!

The only idiocy I've seen in this thread is when somebody asked why there aren't any charts that advocate short term market timing in a RETIREMENT account. You ever think that there's a good reason why something doesn't exist when you think it should? Sheeesh, even by your own admission "I think most invariably fail when trying to do so" it's usually a failure..so you got it right once, if you think you're gonna come out ahead more often than not over a 20+ year span you're delusional

[G Norm Oosdyk]

Originally Posted by Vlad_the_Impaler

My 401 is now down 19% YTD. I'm starting to think about moving just about all of it to a fixed rate (safe) option, just to ride out the storm, and then jumping back into equities when the worst of the storm is over. But a little voice inside my head keeps telling me not to do it.

Given that I don't need the savings for another 18 years or so, what do you experts think?

Yep. Sell low is always a good option.

Or is it sell high? This investment **** is pretty complicated.

[Vlad_the_Impaler]

Originally Posted by G Norm Oosdyk

Yep. Sell low is always a good option.

Or is it sell high? This investment **** is pretty complicated.

That's cute G, but you might want to read the rest of the thread. It's just a bit more complicated than "buy low-sell high".

1. When it comes to 401 savings, do people actually "sell high"? No, they keep it there and hope it keeps going higher. So that option is off the table. This is not like other non-401 investments.

2. We've already established that there's no way to know when the low will occur, so while today appears to be a "low", are you really sure that the market won't drop another 20 or 30%?? What if today is just the midpoint and not the low point??

[tTy]

Originally Posted by DantonIzzo

That doesn't exactly jive with your doom-and-gloom posts re: CDS, does it?

My reallocation transfer would have occurred at close of the markets today. I ripchorded it and bailed with 5 minutes to go... we're not bouncing off 9500 it appears... if it crashes through 9300, there is no bottom in sight, zero support...

[ChicagoMark]

Pulled this from the trading thread on top, post #77. Good info for all in a 401k. So far in 2008 this strategy would have worked perfectly. Sept. and Oct. have been a blood bath. Nov. is right around the corner. Looks like damn good research and advice. At the end of April the SP500 was about 1380. Today 997 and we are not done.
[IMG]file:///C:/DOCUME%7E1/Mark/LOCALS%7E1/Temp/moz-screenshot-7.jpg[/IMG]

THE DEAD ZONE ARRIVES -
Note: this is an excerpt. The entire article, including one chart never seen before, ran in our April 25th issue. Buy-and-hold is utter nonsense....
Over the last 54 years and change, holding stocks from the beginning of May to the end of October in the average calendar year has been disastrous, a veritable dead zone. Virtually ALL of the stock market's gains have come from the first day in November until the last day of the following April. The proof is seen in our featured chart, wherein we have cut the calendar neatly in two to illustrate the effects of the two disparate seasons. If you had invested $10,000 in the Dow Industrials on May 1, 1950, sold your holdings every October 31st, and repurchased them every May 1st, you would now have a paltry $264.42 profit to show for the 27 years you were in stocks (54 years divided by two). To those who would criticize by citing that our computation is sans the benefit of dividends, we would counter that we are also computing without the penalty investors have suffered via the ravages of inflation. A meaningless comparison? Hardly. The 54-year average dividend yield of 2.99% pales next to the indisputable fact that the 1950 U.S. dollar is now worth only 12.3 cents, a rate of decay that far exceeds the impact from dividends!
On the other hand, if you had invested $10,000 in the Dow on November 1, 1950, sold out on every April 30th and repurchased on every November 1st, your stake would have grown to $496,630! The odds of a discrepancy this huge between the two seasons being a statistical fluke are rather remote.

We have no reason to suspect the pattern will change this year. Thus, we expect inflows to again contract during the Dead Zone and provide little, if any, support for stock prices. Since March 2003, a period of over two years, stock prices have moved mostly upwards or sideways or have given ground very slowly. However, history implies a 10% or greater correction will occur every 1.44 years and a 15% or greater correction will occur every 2.23 years.
The timing would seem to be propitious for a correction of substance to occur
during the Dead Zone period of May to October.
If measured from the Dow price of 10,192 as of the end of April, our targeted annual Dow low of 8500 is only 16.6% away. Perhaps our target is a bit low; as usual, we prefer to adjust targets as time passes to account for developments. However, it is clear from the pictures we show today that risks for investors are now quite substantial and we believe the odds favor those who are now out of stocks....at least until the end of October.
Simply put, our target could also be too high.

[IMG]file:///C:/DOCUME%7E1/Mark/LOCALS%7E1/Temp/moz-screenshot-5.jpg[/IMG][IMG]file:///C:/DOCUME%7E1/Mark/LOCALS%7E1/Temp/moz-screenshot-6.jpg[/IMG]

[G Norm Oosdyk]

Originally Posted by Vlad_the_Impaler

That's cute G, but you might want to read the rest of the thread. It's just a bit more complicated than "buy low-sell high".

1. When it comes to 401 savings, do people actually "sell high"? No, they keep it there and hope it keeps going higher. So that option is off the table. This is not like other non-401 investments.

2. We've already established that there's no way to know when the low will occur, so while today appears to be a "low", are you really sure that the market won't drop another 20 or 30%?? What if today is just the midpoint and not the low point??

OK, Vlad...

The 'correct' answer is to have an "age appropriate" asset weighting. For guys with 18 years, you should not sell off (unless you think ) and merely weight your portfolio based on your level of risk... In times like this, the Dow Jones outperforms more risky stocks.

If you do convert to cash you need to reinvest quickly, because when the market does come back the first few days are likely zingers.

[Vlad_the_Impaler]

Alright, so I spoke to my financial advisor this afternoon. His advice:

First preference: Stay the course.

Second preference: Another kind of dollar-cost-averaging, where I would slowly move my investments into cash over a period of time (maybe 3 months), rather than all at once. This way, if the market comes back faster than expected, I still have a foot in the market to take advantage. And if the market keeps going down, I have the other foot in cash.

Not a bad idea...