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The only thing I did this year was downsize my house and buy one I can almost pay cash for, no making purchases on a credit card, stop eating out, stick with my budget. This has allowed me to increase savings and not be so afraid of the future. Sometimes I wonder if those who fear this are the ones in the most debt who are banking on prior investments to pay off debts already incurred - at least on paper.
I'm not a 401k fan although I have one --- all my extra money I used to pay down the principle of my home --- I'm still working at it but owing my house free and clear is a better investment for me.
20-30 years from now this like all other dips will be considered "noise".
All other dips? No. There have been a number of market crashes that have resulted in much more than "noise" both in the US markets and foreign markets. I really don't know why people continue to say things that are simply not historically accurate. The dip during the depression was hardly "noise" and was not forgotten 20~30 years later, for example.
One has to make a distinction between the normal business cycle and financial crises. The latter only occurs one or two times a your life time.
I moved out of stocks about a year ago. Although, I think if I didn't do it already I would still do it today. It is my view that stocks are going to be weak for awhile.
A lot of investment theory is based on the stock market over the last 20-30 years, when you look back further some of it seems a bit odd. When people start talking about "being in for the long haul", I can't help but think "sucker".
Not cashing out... in fact agressively buying through dollar-cost-averaging. I'm in it for the long term so a loss this year is insignificant if I can be buying in this down market.
I'm not a 401k fan although I have one --- all my extra money I used to pay down the principle of my home --- I'm still working at it but owing my house free and clear is a better investment for me.
I'm with you on that, I contribute to the 401k up to the company match and that is it. They try to get you to increase it every year, but no thank you. I would much rather use extra money we have to rid ourselves of our mortgage as you said. If my company didn't match, I probably wouldn't contribute and would just focus on eliminating the house payment before focusing on retirement/investing.
As for the OP's original question though, this is the worst time you could cash out your 401(k) after the market has declined over 20% in a year. I will continue to contribute now more than ever as this is an opportunity to buy low. Proverbs 21:5 says, 'Steady plodding brings prosperity'
All other dips? No. There have been a number of market crashes that have resulted in much more than "noise" both in the US markets and foreign markets. I really don't know why people continue to say things that are simply not historically accurate. The dip during the depression was hardly "noise" and was not forgotten 20~30 years later, for example.
One has to make a distinction between the normal business cycle and financial crises. The latter only occurs one or two times a your life time.
Do I feel we will ever experience a depression like '29? No
Do I feel we can experience a drop like 73/74, '87, 00-02....absolutely.... if you were properly diversified and had a long time horizon, those times only afflicted emotional pain.
That's why I don't plan to start withdrawing in at least 20 years.....being invested in equities for 15yrs + I'm already way ahead of my goals that I set....(my goals back then were for coservative annual gains..)
Again, what's happening right now is "noise" for the long term buy and hold investor... key here is LONG TERM.
If you don't have the stomach to look at this as a buying opportunity, then you're not diversified properly to your risk tolerance. You should then be weighted more in bonds and the like...
Do I feel we will ever experience a depression like '29? No
What you feel and what actually happens are two different things. Also, there are a number of other situations that could cause a market crash to be far more than "noise". You are painting a picture that is simply not historically accurate.
Quote:
Originally Posted by CouponJack
Again, what's happening right now is "noise" for the long term buy and hold investor... key here is LONG TERM.
Yes, you said that before. The question is how do you know this? Perhaps you have a time machine? A crystal ball? You seem to think there is no risk in the stock market for the long term investor.
Quote:
Originally Posted by CouponJack
If you don't have the stomach to look at this as a buying opportunity, then you're not diversified properly to your risk tolerance.
I don't see much of a buying opportunity at the moment, if that means "I don't have the stomach" then okay? I largely exited stocks, by doing so I've made gains instead of losses. Even if I was to buy back into the stock market today I would do much better than I would have if I stayed in it.
I am not retiring for another two or three decades. Why in the world would I care about the volatility of the market today or next year with regards to funds saved for 30 years down the road?
And ditching? What does that mean? I am just going to throw it away? Spend it at the track? Drink it or shoot it up my veins? Its retirement money. I am going to retire on it. And quite well I might add.
What you feel and what actually happens are two different things. Also, there are a number of other situations that could cause a market crash to be far more than "noise". You are painting a picture that is simply not historically accurate.
Yes, you said that before. The question is how do you know this? Perhaps you have a time machine? A crystal ball? You seem to think there is no risk in the stock market for the long term investor.
I don't see much of a buying opportunity at the moment, if that means "I don't have the stomach" then okay? I largely exited stocks, by doing so I've made gains instead of losses. Even if I was to buy back into the stock market today I would do much better than I would have if I stayed in it.
I do understand what you're saying, but I think we'll agree to disagree on this.......we differ on how historically the stock market has performed....
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