Financial People 401K Question

[12RingKing]

The markets can stay down for 2-5 years. Go back and look at the last eras of high inflation.

S&P hit 109 in 1968 Took all the way until 1979 to stay above 109. Was as low as 72 in 1970 and 63 in 1974

Inflation is a beast. This is NOT a FED simply print more money to bail out the stock market scenario.
I still say SPY will go under 300 in 2023. But also think it's best more most to hold and buy monthly at this point. Or at least be saving/raising cash to buy bonds soon.

My approach is to continue to invest as usual, however, when I make cash contributions I am holding it in cash. I have roughly 30k in cash waiting to be invested and in January it will be closer to 50k with my yearly contribution and after-tax rollover from my 401k. At some point I will start dollar cost averaging in my Roth IRA where the cash resides. Right now, I’m somewhat enjoying watching the market fall as bad as that sounds.

[BrianL]

If you can handle the tax burden now, converting some or all to a Roth 401K will save you some money in the long run. Otherwise let it ride and keep buying.

[DOUBLE-Z]

Do you have multiple options to invest in? Every 401k I have participated in and currently participate in, give from 5-15 different investment options to apply towards. I moved all my money to cash reserve for now so I don’t take any loses. I will move it all to an aggressive fund once the market turns around. I personally watch and manage my 401k at work.

As a financial advisor myself, please, nobody do this…

It sounds great on paper, but you have to be right twice. You have to sell it at the top and buy it at the bottom. Spoiler alert, you aren’t that good. Also, if your money isn’t invested, it isn’t “working for you” Yes the market has dropped throughout most of this year, but your funds are most likely purchasing shares through dividend reinvestment as well. There are certainly other reasons to go along with these.

[dirtybay]

I’m up 35% in returns for the year so I must be doing something right. No way would I leave money in a tanking fund when there are safer options. Best of luck.

[Rwc]

I’m up 35% in returns for the year so I must be doing something right. No way would I leave money in a tanking fund when there are safer options. Best of luck.

Dude, congrats, I need to invest some cash with you! If I had gained 32% in returns off my investments this year, I would be crowing also!

You have out performed every financial guru I know, beat the pants off Warren Buffets group.

Rwc

[RiverRat1]

I’m up 35% in returns for the year so I must be doing something right. No way would I leave money in a tanking fund when there are safer options. Best of luck.

On how much money? Up 35% on under 10k is a completely different ball game as being up that much on 200k and yet another game on 1 million.


But it's still impressive. How are you up that much, daytrading?

[tx_basser]

35% rofl

[jbw899]

Buy more. If your 401k is maxed out make sure you max out a traditional or Roth IRA. Low cost index funds always outperform over long timeframes.

[RiverRat1]

As a financial advisor myself, please, nobody do this…

It sounds great on paper, but you have to be right twice. You have to sell it at the top and buy it at the bottom. Spoiler alert, you aren’t that good. Also, if your money isn’t invested, it isn’t “working for you” Yes the market has dropped throughout most of this year, but your funds are most likely purchasing shares through dividend reinvestment as well. There are certainly other reasons to go along with these.

You do not have to be right twice. You don't even need to be right once. One could have sold at any point after Dec 2021 when the FED said they'd be raising rates all the way up until May. And very possibly one could still sell and the markets continue down. Just need to buy back lower than you sold.

Now I agree people do not tend to buy back until it's too late though.

And the financial advisor I fired for telling me my uninvested money was not "working for me" cost me a crap load of money. That's one of Wall Streets biggest lies. If one held cash all of 2022 so far they'd be far far better off than owning stocks or even bonds.

Would you rather lose 8% to inflation or 25% to falling stock prices?

[DFA]

For those commenting on not enough info, im 49 and plan on working to at least 65 unless I win the lotto lol. My company match is 6% and that is what I put in. Since I don't understand any of this, I let my Fidelity tell me where to put the money. I am considering a private financial advisor, but after their fee's etc, not sure how much better off I would be.

[Rush2Judge]

Target date fund and just keep your head down and keep putting money in. No need to over think it.

[RiverRat1]

For those commenting on not enough info, im 49 and plan on working to at least 65 unless I win the lotto lol. My company match is 6% and that is what I put in. Since I don't understand any of this, I let my Fidelity tell me where to put the money. I am considering a private financial advisor, but after their fee's etc, not sure how much better off I would be.

Would be foolish to not at least match the 6% then. But while markets are down I'd do as much as possible.

Finding a good FA would be worth it. But finding a good one is hard. Easy to find one that tells you all your money needs to be working. Which is true most of the time BTW So once rates peak that logic will probably serve you well.

What Rush2judge said also. Don't over think it.
But IMO we may be approaching the best time in 40 years to build a bond ladder.

[Mudslinger]

The problem some of have is, we are already retired and at age 69, not sure how long we have left on this earth. We have seen our mutual funds take a 25% to 30% hit since this current Admin took office. Not sure we have enough time let to "let it ride" until it comes back up to where it was at it's peak.
We have some annuities, a little SS and TRS payments from me, the wife has yet to draw her SS, but this is still scary to us.

[kdm015]

I am a buy and hold guy. Look what it has done for Buffet. His advice to investors is to use the vanguard/john bogle methodology. Invest in a mix of Index ETFs and keep contributing as much as you can until you retire

[Bayouboy]

35% rofl

It can be done. I am up almost 60% over the last year on stocks. That was the only thing showing promise so I dumped a lot into them. Fidelity thought I was nuts. But it has worked out in a big way.

All I will say is go back and look at the price of MPC stock during covid and what it is today. I bought at the right time X a few thousand shares.