We actually have almost 84% of our nest egg parked in a cash account now. But we do not have the gut to invest any of it in the stock market now. If I were much younger, I would be more courageous to jump in because 1) the time horizon for us to have a need to access the money is still very long. 2) I still have many decades of working life and I could still make money to put more of it into the retirement account if needed.
But both 1) and 2) are not the situation I am in now. I can not afford to lose in my current situation.
I think in one of the downturns in the past (likely the 2001-2002 one), I initially was not in the stock market, but I jumped in when SP500 dropped from almost 2000 to 1500. When it dropped to 1280, I became panic and jumped out and locked in the loss. I think the lowest point later was below 900 but I did not have the gut to jump in (all my 401K was in some “stable value/cash-like” account at that time.) This is Monday Quarterback to say this: If I jumped in with all my nest egg, I would really go for a kill and could earn it big.
I think I did not lose any money in the 2008 downturn (and did not make any after that - I had been too chicken to be in the stock market before 2008 and stayed out of it for many years.
I was also in cash in 2008-2009, we just had to transfer out of one 401k plan to the next. Didn’t have the gut to invest then either. Only when the Dow was 10,000 before I started moved some money into stock. I wish I had the gut.
But how do you lose, if you are looking at a longer time frame? You only lose if you invest, and pull it out when you get scared. Just because the market goes down, and your account goes down, doesn’t mean that you lose. You only lose if you sell. Why not pick out some good stock mutual funds, with an excellent long term track record, and invest, when the market takes a dip?
Well if you(as in MCAT) are anxious about the stock market then it’s best not to invest in the stock market. The anxiety and stress are not worth it.
For me my situation is slightly different. I did call and ask if I could transfer my 401K to Vanguard early, they said I could but reading the fine prints, I might not be able to contribute to 401k contribution for the next six months once I do that.
What do you mean by saying “transfer my 401K to Vanguard early”? Mainly what do you mean by “early”? Do you mean it is a transfer before you are 66 yo? before 55 yo?
I once transfer my 401K from Hewitt (I think it is the name of that investment company) to my bank. This happened a month after I, at 55+ yo, had left my company whose 401K was managed by Hewitt. I could request the transfer online , did not have to talk to any person at Hewitt at all, and Hewitt did a trustee-to-trustee transfer to my bank (by sending my bank a check, ir even a wire transfer to them, not to me but I could be wrong in the details here.) It then became an IRA account at my bank. The bank asked me how I wanted to invest it - I built a CD ladder over the next few years. The “personal bankers” at that bank kept asking me to do the “true investment” till today. But the only thing I have done is to replace the CD ladder with a saving account, and wait for an opportunity to slowly roll it into some “true investments” instead of parking it in cash. I heard it is better to transfer the investment gradually instead of transferring the whole in one big step. By doing it over a longer period in many steps, it averages out both the up and the down of the market, so it is “safer”. There is a name for this strategy but I can not remember this name.
mcat your are correct. Our Financial Guy has invested our monies bit by bit and, just today, took a chunk and bought low, still leaving 10% in cash just waiting for the right time to throw that in also. He as take 1.25 years to invest our money.
He also told us that the company has BILLIONS of customers monies sitting in cash the last 1-2 years.
We took a full 50% in an annuity when H retired May 2014 and are SO grateful that we did.
Two brokers in my radar screen are Fidelity and Vanguard. I am a fan of index, like SP500 index. But I think I will need fixed income component too in my age.
I am too nervous to be a good investor. Even when I was much younger, I only invested in some balanced account, for which 60% is in stock. Later, I invested more in SP500 index. But in even later years (when I was older), the fewer percentage of my retirement account was invested in this kind of index fund. The index fund is still a risky stock investment; the only benefit is that the fees are lower and it is invested in more companies - but it is far from being diversified sufficiently.
Like everyone else, my funds dropped in the last three days. But I also have some small gain: my rollover check from John Hancock arrived in my Vanguard account last Friday. The check was cut when the market was still high. Vanguard is supposed to buy the the new fund today. I hope I will get trade confirmation in a few hours.
I SO want to retire. Slowly convincing H that we can afford it. Now the stock market goes crazy. Although we are certainly not solely invested in stocks, it still makes me very anxious. ( He is now the one saying not to worry)
I figure I want to retire in 4 years. I will almost be 66. H is 2 years younger. So if he wants to work another 2 years after I retire, I can handle that.
I will return to work next week after having been basically off for about 16 weeks. When I do go back to work, I actually only go in on MWF. I also have off about 4 weeks from mid- Dec. to mid- Jan. I also have other long weekends, etc. So my full time job is so much less than most full time jobs.
I work as a college prof. Sounds like an ideal job. And it is! But I get older and the students remain the same age. There are things about it that just get old!
I have been trying to check off bucket list items the last few years. . H wears a pin that says " The best things in life aren’t things." I agree, so we have been putting our focus on experiences rather than house and acquiring things. We have been taking two long trips a year–one to a warm place in the winter and the other more exploratory ( international or national park, USA for example.) We also go for several weekend trips through out the year.
I am loving it and it has been generally very good for our marriage.
I sold in June when I was on vacation. I only kept international fund because that was the most value according to everybody else. I think I only made 2% on the last chunk I transferred last year, nothing to write home about. The China thing blind sighted a lot of people. It turns out the Chinese stock market is not like USA, mostly moms and pops. It was in the radio today.
That’s too risky.
So I tried to peek last night but Prudential didn’t upgrade their system (maybe they do after midnight). So this morning I did see it, yes another bad day of decline. Aug drop (from 8/1) went from -5.33% to -8.56%, so one day 8/24 decline of -3.23%.So lost all gains from this year at this point, $70,000. However since the funds we are in have strong 3 yr, 5 yr, 10 yr data, and our financial guy says the three bear indicators they are watching are not triggering, we are on the roller coaster ride. Have no international in our portfolio - however it depends on the international fund as to where it is invested, and what economic sectors I guess; the funds we had available were not doing well and I am certainly not even looking at those funds now. Had I gotten out of international in 2014, our portfolio performance would have been better, as the negative international performance dragged our account down.
All of our retirement nest egg is not in this 401k acct, but we can’t move money out of this acct until H is 59.5 or leaves his employer. He turns 59.5 in Dec. We are meeting with our financial guy about a week before to see what our options are for greater diversification. We have gained a lot of peace of mind when we did get the money we could move (Roth IRAs, IRAs that we then converted to Roth) into other things - like annuity. Trying to continue to earn the reward but balancing off the risk.
Until we get out of this slump, logging in and checking account daily. And also watching markets and market analyses more carefully.
No point getting out because you don’t want to get out when this may be the current ‘bottom’.
Hard to hit the top and the bottom - better to think in long term like @veryhappy says.
Yea, my account lost some more $$ on Tues. Friday was most, less loss on Monday, more but very marginal loss on Tues ($4600).
Prudential hasn’t been able to keep up with all this: “Due to difficulties with the transmissions of pricing information from one of our vendors, price per share for certain investment options within your plan may not be reported accurately. Prudential Retirement is diligently working to correct this pricing issue as quickly as possible and apologize for the inconvenience.”
I can predict our 3rd quarter numbers are going to suck…
I meant to be including everyone with the ‘our’ @veryhappy
Have to go do something to make me smile… can’t do anything about the markets except pay attention to them a bit and then not let them ruin the rest of my life…
