My Own Incompetence Has Epic Payoff

[bshole]

Nearly a year and half ago I moved my entire 401k out of the stock market into a money market. I then watched with horror as the market skyrocketed. I was so depressed that I did not login into my 401k until yesterday. Unbelievably I saw that my account balance had grown by 200k since I last logged in. It turns out that my attempt to get out of the stock market must have failed in some way. I am guessing that auto-rebalancing put me back into the market.

Now the question is, should I get out of the market now or are there legs to this bubble?

 

[s0me0nesmind1]

Yes, you should totally try to predict the market. I hear that always works wonders.

First how about some answers... how old are you? how close are you to retirement?

Also, you should be constantly monitoring your accounts, ideally on a weekly basis - but at least on a monthly/quarterly basis. You can always use sites like Mint to monitor all your finances.

 

[highland145]

Good for you. Now say it with me, "Thanks, Trump."




Don't go all postal, this is OT.

 

[Exterous]

Predicting the stock market is pretty hard. There was a study out there that was posted on Bogleheads that the worry about a crash was typically overblown and that the gains by staying in the market during the inevitable rebound more than offset the losses of the crash. Once you add in all the false crash fears and you're better just leaving your $ in. I am paraphrasing since I cant find the actual post of study at the moment. There are some additional works out there that show 100% stocks is the best position to be in if you're retirement timeline is long enough - and this includes going through periods like the Great Depression and the high inflation of the 70s. (https://earlyretirementnow.com/2016/12/07/the-ultimate-guide-to-safe-withdrawal-rates-part-1-intro/). Even for shorter periods mostly stocks work pretty darn well. There is probably something to say for moving to inflation protected assets with low growth once you have a decent cushion beyond what is 'enough' but otherwise you'll do better keeping money in stocks than trying to time crashes

 

[s0me0nesmind1]

Predicting the stock market is pretty hard. There was a study out there that was posted on Bogleheads that the worry about a crash was typically overblown and that the gains by staying in the market during the inevitable rebound more than offset the losses of the crash. Once you add in all the false crash fears and you're better just leaving your $ in. I am paraphrasing since I cant find the actual post of study at the moment. There are some additional works out there that show 100% stocks is the best position to be in if you're retirement timeline is long enough - and this includes going through periods like the Great Depression and the high inflation of the 70s. (https://earlyretirementnow.com/2016/12/07/the-ultimate-guide-to-safe-withdrawal-rates-part-1-intro/). Even for shorter periods mostly stocks work pretty darn well. There is probably something to say for moving to inflation protected assets with low growth once you have a decent cushion beyond what is 'enough' but otherwise you'll do better keeping money in stocks than trying to time crashes

Yeah, I think they even had a study where one group tried to predict the market with calculated efforts, and the other group were chosen at random... or with darts thrown a board or something and the darts won.

I think the hardest part of selling before a downtown is obviously predicting the downturn, but furthermore it's predicting if it has hit the low or if there is more to come. Either way, as far as retirement funds go I refuse to touch it. Stock trading is a full-time job that requires tons of research... and everyone here has an unrelated full-time salary job (and kids, and other shit in life). Point being, no one on this forum is an expert and never will be. It requires too much time that no one has.

 

[bshole]

Yes, you should totally try to predict the market. I hear that always works wonders.

First how about some answers... how old are you? how close are you to retirement?

Also, you should be constantly monitoring your accounts, ideally on a weekly basis - but at least on a monthly/quarterly basis. You can always use sites like Mint to monitor all your finances.

15 years to retirement.... if I retire. Total assets around $1.7m. I am hoping to have around $3.5m at retirement.

This market is unreal. It makes no sense and it is obviously a bubble of epic proportions. It has to pop soon. If I could time it, my retirement would be taken care of.

 

[PricklyPete]

How old are you? How close are you to retirement?

 

[John Connor]

You can always use sites like Mint to monitor all your finances.

The last time I read about them I read that they store passwords in plain text. That was about 3 or 4 years ago. And I for one wouldn't want all my eggs in one hacker basket.

 

[John Connor]

Good for you. Now say it with me, "Thanks, Trump."




Don't go all postal, this is OT.

Billions, and billions, and billions billions, and billions, and billions billions, and billions, and billions billions, and billions, and billions billions, and billions, and billions billions, and billions, and billions billions, and billions, and billions...

 

[Exterous]

If I could time it, my retirement would be taken care of.

Well sure. And if I knew how well Amazon would do I could retire too. While this has already been the 2nd longest in duration and 3rd longest in gains to top the list for gains we still need another 50% increase to take the #1 slot. While its certainly unusual, how much would you have lost out on if you had listened to the start of the 'crash' talks that started back in 2011. You would have missed out on that $200k this year which was already attenuated by your decision to move money out of stocks. Most losses aren't as extreme as 2008 or the Depression. So lets say you had moved all your assets out of the market earlier this year and they stayed there - so you have $1.5M in assets. You would have missed out on $200k plus what whatever gains you lost out on with the initial change. Lets say those gains were a conservative $50k giving us $1.75M. A 15% 'correction' would put you at $1.48M - so very little difference between the $1.5M portfolio (WHich would be $1.56M with a good 4% ROI in a down market) if everything was out of the market. A more severe 'bear market' would put you at $1.31M after a 25% loss. But these crashes also last a very short time, typically just 10 months. More importantly in the 12 months after these crashes stocks typically increase 30-35%. So your $1.31M portfolio becomes $1.7M 22 months after the start of the crash. If your 'safe' non-stock $1.5M portfolio grows 4% over the a year of crash and a year of recovery then you will end up with $1.62M. So even for your typical bear markets you would be better off keeping your money in stocks if your timeline is 2+ years.

 

[John Connor]

and the high inflation of the 70s.

As if the dollar is worth what it was back then? Inflation always happens. It's gotten worse if you ask me. I don't study numbers and crap, but as a consumer, just going into a store and buying little of nothing you just dropped a Benjamen.

While perhaps there was "high inflation" in the 70's, but my parents often tell me that it seemed their dollar went for a lot more. I mean, the simple fact that it takes both parents to make ends meet anymore justifies that.

 

[RLGL]

Good for you. Now say it with me, "Thanks, Trump."

The run up in the market has nothing to do with Trumpty Dumpty. Remember "What goes up, must come down"

 

[pete6032]

You should be investing in progressively less volatile assets the closer you get to retirement so the prospect of a market crash is easier to handle.

 

[BxgJ]

15 years to retirement.... if I retire. Total assets around $1.7m. I am hoping to have around $3.5m at retirement.

This market is unreal. It makes no sense and it is obviously a bubble of epic proportions. It has to pop soon. If I could time it, my retirement would be taken care of.

I'll leave specific investment advice to others, but given those assets and time span you should have no problem hitting your target.

The only thing I will say is don't 'panic' invest, or 'emotionally' invest. I've seen too many people leave massive returns on the table, or lock in massive losses, because of this.

 

[John Connor]

This market is unreal. It makes no sense and it is obviously a bubble of epic proportions. It has to pop soon. If I could time it, my retirement would be taken care of.

I can guarantee you that it will pop after Trump leaves office. Hopefully it doesn't and things just wind down gracefully. I personally think we have 7 years to see the market increase its gains. Unless of course some unheard of cataclysm happens.

 

[highland145]

The run up in the market has nothing to do with Trumpty Dumpty. Remember "What goes up, must come down"

 

[KMFJD]

I can guarantee you that it will pop after Trump leaves office. Hopefully it doesn't and things just wind down gracefully. I personally think we have 7 years to see the market increase its gains. Unless of course some unheard of cataclysm happens.

Humour me, why 7 years?

 

[FeuerFrei]

Reminds me: I have an account I ignored for over a decade. Wonder if my negligence has paid off.

 

[highland145]

Reminds me: I have an account I ignored for over a decade. Wonder if my negligence has paid off.

Or the state spent it as unclaimed funds....

 

[John Connor]

Humour me, why 7 years?

Well, since I was able to "humor" several, saying Trump would indeed win in a landslide, I guess I can "humor" you with the fact that the people at large are tired of the statuesque. I'll stop there in an attempt to keep this out of the insane asylum known as P&N and to not get too P&Ny.

Did I answer your question and humor you?

 

[John Connor]

Or the state spent it as unclaimed funds....

Don't they put it in a state account as unclaimed?

Speaking of... I've heard that safety deposit boxes can be gone through by the Feds. One reason why I'll never pay the outrages fee for one and just use my fireproof safes instead. Liability is with the homeowners insurance.

 

[Darwin333]

Good for you. Now say it with me, "Thanks, Trump."




Don't go all postal, this is OT.

Here I was with that warm feeling inside from a rare feel-good thread and you just had to go and ruin it for me.

 

[KMFJD]

Well, since I was able to "humor" several, saying Trump would indeed win in a landslide, I guess I can "humor" you with the fact that the people at large are tired of the statuesque. I'll stop there in an attempt to keep this out of the insane asylum known as P&N and to not get too P&Ny.

Did I answer your question and humor you?

No humour found

 

[highland145]

Don't they put it in a state account as unclaimed?

They used to here but I was trying to be positive.

Here I was with that warm feeling inside from a rare feel-good thread and you just had to go and ruin it for me.

Well, I posted something like "Don't flip out. This is OT" at the end of my post and colored it white. On the old forum, it would show up when quoted. Apparently, not any more.

 

[bshole]

I can guarantee you that it will pop after Trump leaves office. Hopefully it doesn't and things just wind down gracefully. I personally think we have 7 years to see the market increase its gains. Unless of course some unheard of cataclysm happens.

So..... 16 straight years of gains, I find that doubtful. That would be unprecedented in American history. The current run has quadrupled the market since 2009. I think that beats the run under Bill Clinton. This has got to be the tail end.