What is the upside to keeping your 401(k) or other retirement funds in stocks. Did you learn nothing from 2008?
You are on the wrong side of the Federal Reserve and a global recession. The major indices are down over 11% this year alone. More than $16 trillion has been lost in global equity value in the last 6 months.
You think buy and hold is the way to go? Tell you what, if you don’t lose another 10% in your fund, that’s yours to keep.
“But my adviser says ‘stay the course.'”
Listen, if your compensation was determined by the amount of assets you manage, then you would give the same advice.
You don’t have to be a market-timing pro to know that stocks are going lower while the Fed still has a bias to raise rates. As I said here you’re only hurting yourself.
Why not park the funds in a money market fund for the time being? It’s not like you will be perfect, however you conserving your wealth. Why lose another 10% in assets before pulling and then miss a turn upward?
You don’t need to time it perfectly, you just need to catch it when everyone is so bloody that equities have to go higher. That will probably be in March as the Fed talks about lowering the rate back to zero when the S&P is close to 1,500.
But for now, let the global central bankers experiment on their fix with your money out of the game. If you miss the first 3% move up on stocks, it’s fine because you also missed the last 10% move down.
It’s about preserving what you have in order to get the most bang for your buck when stocks turn around. It’s really that simple.