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Take the money you don't need for the next 10 years and dive back in. Your next 10 year money is safe and you don't totally lose out. Your cash position is safe and chances are your equity position will be higher in 10 years.
It's hard when you look the largest balance you've ever seen to think about it going away. I get how you feel. But it's almost worse to watch that cash money grow at 2% while the market bombs ahead. If your invested money is for 10 years from now you won't lose. If you do, the world has turned to sh*t and it won't matter anyway.
Food for thought: Everyone of us who didn't cash out yesterday effectively purchased all our holdings at yesterday's price.
That is something everyone forgets..each day we keep the money in play is like buying at yesterday’s prices...whether we sold out and bought a new investment or kept the old one in play is irrelevant.. all compounding will be done on yesterday’s values
I'm just really nervous about the stock market right now - seems to me that manufacturing in the US just continues to decline, and Trump's tariff threats worry me, too. Plus I'm nervous about the political situation.
The question now is, other than money market, where to put all that retirement money, that would do well, safely, while we wait to jump back in?
I'm early 40s. Given that I loath my current job/career (public safety, quasi state agency, mediocre pay and benefits), I'm looking to change careers. I still figure I have at least another twenty years of work. Given this, I've been pretty conservative with my money. I recently paid off car loans and have paid a lot down on the mortgage in recent years.
From my standpoint, I see no reason why the market should be so high. Corporate profits and savings are great, but if they aren't being returned to a good number of the employees (especially the lower paid ones) or given back in dividends to shareholders, I don't see any reason to fork over $207/share for Apple stock, or $1,264/share for Google, etc. etc.. Some in my field in my area have seen significant wage increases over the last ten years. Even so, I still don't see how individuals can invest given the price point of just one share of various stocks. Of course the pro-Wall Street crowd will say pool your money and use mutual funds or ETFs, but all that means is that all the investors are still left holding a lot fewer shares of companies compared to when I first started investing twenty years ago.
With interest rates so low, savers have been decimated. There is no safe investment that will "do well" from what I can tell. I'd say just stick with CDs and try to make something, but maybe risk a bit by using bear ETFs such as FAZ or TZA.
Our family financial situation has changed recently. It's not that we will need the retirement money right away, but we are certainly much less risk tolerant right now, due to a very serious health issue.
I think that the poster who wrote that we're pulling out a year early is probably right, but I wish that I had pulled out a year early before the last serious drop. I think my biggest challenge will be knowing when to get back in. About 25 yrs ago, I listened to The Great Crash (Galbraith's history of the 1929 Crash) - fascinating reading, especially when you look at the high tech boom and crash of about 1999, and the real estate boom and recession and ensuing stock market crash of 2006-2008. It's as if history only knows one song. Anyway, one thing I remember him writing about the 1929 crash is that it just kept going and going, down and down, until 1932. So even those who had forseen it but jumped back in too early lost a lot.
I think that if it happens while Trump is in office, the sign that the big crash is coming will be the Fed reducing and reducing interest rates to try to prop up the falling market. That will be the end, because once the Fed funds rate is back down to virtually 0, which it was at from 2008 to 2015 in order to try to ameliorate the effects of the Great Recession, there would be nothing more that the government could do to directly influence the market, short of the government buying stocks or negative interest rates.
You're absolutely right - it's all gambling on another man's game.
If your risk tolerance has changed and you want to make a permanent change in allocation that's understandable, but if you plan to put it back into the market at a later time there's no reason to believe it will be safer at that time than it is now.
You could consider strategies that allow you to capture most of the market when it moves up, but limits your losses when it goes down. I currently know of 2 strategies like that:
1) Hold index ETFs (SPY/QQQ), and keep a strangle around it at all times
2) Split a portion of your capital into 90% one year TBills, and 10% 12- or 24-month calls on QQQ (you can make it 95% / 5% if you want to be less aggressive)
These two strategies have slightly different return profiles, but each allows you to participate in the market's upside while limiting your downside. You'll take a hit when the market tanks as in 2000 or 2008, but not as bad as the market itself. And when the market rallies after the collapse you'll be starting from a higher base because you didn't fall as far. But with either strategy, you can stay in the market all the time and not worry (too much) about the next big market correction.
I don't see anything wrong with a mix of stocks, bonds, cash, cd's, t-bills, real estate (your house). Previous posters are right, cash is nice but you can't beat inflation so you are effectively going backward holding all cash. And in the end, you are betting on the system. Don't forget that. Your cash is just paper. Your accounts just numbers on a page. If it all melts down, it won't matter what investments you have. Or what cash you have. I don't think we have a market problem, people have an allocation problem. Hold more cash if you like, but have some in stocks and bonds so you at least keep even. Cash can hold you over so that you don't sell in a downturn as well.
so you are out. If you have 1m you will get 22000 this years. I've made 16% this years up 180000.
Last 10 years you will have made 220000, I have made 1800000. If I lose 1/2 I'll still have 990000
so you are out. If you have 1m you will get 22000 this years. I've made 16% this years up 180000.
Last 10 years you will have made 220000, I have made 1800000. If I lose 1/2 I'll still have 990000
since when did 50% of 1800000 become 990000?
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