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My 401k is eating a bag of s in 2016.
A few days ago, I transferred all but 5% of my 401K from stock funds, to bond funds. I left my contributions all in stock funds, but I wanted to take the risk out of my current holdings. I wish I had made this decision much earlier, when I though about it, but I was late at pulling the trigger. Mid 2015 would have been the beast time to do so. As it stands, my stock funds lost around 16% since then. That's a huge chunk on money. Reading different experts, I suspect the best time will be at least three month away before I go convert back to stocks.
I should have followed the stocks closer. My mistake.
Pro: I shielded myself from farther drops in the market.
Con: We are already at bottom, and I can harm my position more by getting in om growth late.
I hate gambling. I hate the way politics muddy the facts.
My 401k is eating a bag of s in 2016.
I've been reallocating to more bond funds for the past year or so.
Why not vanguard target funds?
I'm not crazy about target funds. I do have a small chunk in a Target 2025 fund, and it has done fairly well the past few years.
My stock funds did great until June. They gained as a share price a factor of three since 2009 till June 2015. I only hope I made the right choice. I usually ride these stock price roller coasters out, but this time, I'm worried.
So did mine, and I'm afraid it will slip farther. That's why I moved my current holdings to bonds, and kept my current contributions in stocks. At least as I buy cheaper and cheaper, when it rebounds, my current investments can likely double in value.My 401k is eating a bag of s in 2016.
it's usually bad form to get in and out of the market....
I agree. That's why this is a scary choice for me.
The market took a rather large drop in August. We were assured by the experts it was temporary, but then it took another serious drop at the end of 2015. I have little trust of any expert these days.
Why do you think bond funds are safe? Bonds work inversely to interest rates and their value goes up and down just like stocks. With interest rates at historical lows where do you see he upside in bonds? On top of that, you can guarantee that every big bond fund owns Puerto Rico tax free bonds whose value will more than likely become zero in 2016 for a big hit to their portfolio and fund holders.
I just leave mine where it is and hope that the market recovers. If, one area is high (sell on a day when the market is up), I'll re-allocate to something cheaper (buy on one of those 300 point DOW drop) but I'm reluctant to take any loss - as long as I don't need the money.
I'd like to retire within a couple years. I don't want to go thru another 2008/09. If you look at the 10-year charts of most good fixed income funds, you see a slow steady rise, even during 08/09.
I have a bunch in div-paying stocks too.
anyone depending on their 401k alone for their retirement is a complete lunatic
Depends on how much is in that 401K.
The only upside to a well mixed bond fund is they are far less volatile than stocks. They don't just drop 5% value of so in a day.
Yep.
More than 20 years of allocations at the full 15% and compound interest yields seven figures rather easily.
I'll still (hopefully) have SS when I retire too.
Both the Dow and S&P 500 have dropped since I pulled the trigger. I'm becoming more comfortable with my decision.
You have not lost anything until you cash out. That's the way I would look at it.My 401k is eating a bag of s in 2016.
Honestly, dollar cost averaging is the only way to go if you don't have the time.
I don't think anyone on here is an expert, so if you use big market timing moves, you can get burned badly.
And if you play the game long enough you will get burned.
I am still doing rather dangerous things by buying during what I think are panic periods now. I have been lucky. My horizon is longer than the vibe I'm getting from others though.
This is not necessarily true. There is only one year, 69, when both Stocks and bonds died at the same time. The vanilla bond funds are still out there. You must be referring to unconstrained bonds that are sold as income generators for those on fixed incomes. Vanilla bond funds can be used to shelter.
Thats the right idea sport, sell low buy high. If u think oil will rebound at some point, try etf USO. If u really want to gamble then the triple levereged etf uwti. I know the outlook on it is low and thats good, but eventually oil will go back up by some means.
And you will become frustrated when you fail to re enter at the right time and reap the benefits. People talk big about this kind of stuff all the time when they have actually had their asses handed to them. I like listening to older folks who have seen failure and admit so. People who have truthfully made mistakes and explain them are very useful.
So true. One reason why this was so hard of a decision for me. Some years back, my next door neighbor and I discussed 401k's. He was panicking and I explained to him the stock values would return, and currently (those years back) that all his current buy-ins were buying shares and lower and lower rates, which would pay off when the values returned.
He took my advice, and thanked me when the stocks returned.
Yes, time is relevant for long term returns. I haven't made but minor changes of my 401k finds since 2009, and that was nothing more than changing the allocation to different stock funds. In early 2009, because of the economy, was the last time I had all my funds in bonds... for more than a year. I missed my bottom fishing by a few days, but it paid off well.
I think buying when it is cost averaging while others are selling is best. While prices are dropping, you are buying shares cheaper and cheaper.
Yes, I will if this backfires on me. I suspect one or more more dips before I will enter back into stocks. I hate this, because I haven't bothered watching stock or hype for several years, and I hate spending time from life to watch it. I went back into stocks last time on 3/9/09, after moving to bonds on 6/25/08. That paid off real well for me, but it was a gamble then, and is a gamble now.
And I just might have my ass handed to me. As the thread le says: "I did a scary thing."
When in the past has the market gone down when interest rates were essentially zero?
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