On-again, off-again tariffs, mass government layoffs, funding cuts and immigration crackdowns have seriously spooked Wall Street, which is emphatically rejecting President Donald Trump’s chaotic economic agenda.
On-again, off-again tariffs, mass government layoffs, funding cuts and immigration crackdowns have seriously spooked Wall Street, which is emphatically rejecting President Donald Trump’s chaotic economic agenda.
This is why your 401k should be set it and forget it.
Pulling money out because the market took a large downturn is a rookie mistake. If the economy crashes to the extent it likely will, the money you pulled out will be worthless (especially since I bet Trump thinks you can just print more money to fix a recession).
The market will eventually bounce back, though. All you’re doing by selling is helping the rich get more wealth since they’re buying up everything for cheap.
For example, during the great depression an entire town pooled their money and bought shares of Coke and left them. Every family that did so ended up very wealthy.
? Why would my money be worthless? That makes no sense.
I moved it from the s&p fund in the 401k to the money market account still in the 401k. If I have (for example) $100,000 right now and I put that into the money market account. Then the market crashes I basically still have the 100k . Now it bottoms out and I put the money back into the s&p. I just sold high and bought low. When the market rebounds I get the gain. How do I have less?
Now could I in theory miss the rebound? yes
Then I’d be out the money. Then I would have less than what I would’ve had I stayed in.
The if market tanks as bad as what I think it will. Then I have made the better decision.
No guarantees either way, but my gut instinct says we’re in for very bad next couple couple of months.
As for set it and forget it. That’s still stupid. Always watch a 401(k) to see. Are you really getting the best return on your money or should you be in a different fund within the 401(k).
Most times I would not put the money into a money market account. Most times I’ll just ride up and downs and come out better than the long run. But there are times it’s better to make a harsh decision.
True.
How will you know in the moment the market has bottomed out? If you can accurately predict that, every fund manager and investor in the entire world will give you whatever Earthly delights your heart desires for that fantastically impossible answer.
You will have your $100k, but you’ll have to leave it out of the market forever for it to have been the better decisions. The moment you put it back in could be when the market actually bottoms out. It is simply impossible to know when the best time to pull out and put back in is.
As an example, lets say you pulled your $100k out today. You’ve already missed the best timing this year when the S&P500 (assuming thats what you were in) was at its peak on Feb 19th. You’ve already timed it wrong. Your plan requires that you time it correctly the next time with nothing else to give you any extra help as to how. Keep in mind, I’m not claiming I could guess either time right either. I’m saying no one can.