401K fund question.

Everyone’s fund took a beating over the last year.

Changing funds wouldn’t have prevented it

401k taking a beating and my Own personal brokerage account taking a beating. Two times the fun

Thank you for the feedback.

Why the global exposure?

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Why the global exposure?

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Diversification.

There are periods of time where foreign markets outperform domestic markets. US has beaten foreign handily over the last 10 years and that's a longer than average time, if I remember correctly, without a reversal.

Your 401k should expect to take losses every now and then. Stocks do not only go up week to week, month to month, and year to year. Over a career, they should only go up. Your plan should account for this. The idea of selling during bad times is a bad one. A plan that doesn’t account for bad times is a bad one.

401k funds are also extremely unique to the individual plan. Most of them are target-date or broad-based index funds. You would need to list what’s available to you for any useful advice.

Without that, the best general advice:
Don’t try to beat the market if you don’t know what that means or are willing to put in the time and effort, knowing that you are taking a fair amount of risk to even try.

If you find that a correction, bear market, or a dip makes you nervous, you should hold more in bonds until you can sleep well at night.

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until this drop is finished

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When will the drop be finished?

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I lost 33% of my portfolio in the last 6 months. Yesterday I moved everything into some stable bond funds until this drop is finished

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Generally safer to buy a total market or s&p fund until it hits its prior all-time high before “locking in your loss” in a bond fund thst won’t recover like the market should.





Big dips are generally a time you should buy now, not wait until you see the recovery, which is the only way to identify where the “bottom” was.

One friend of mine is a very aggressive saver- retire in 40s type but his wife won’t let him. She also insists on a fairly heavy bond allocation. He has a number- I forget, but something in the 10% range. each time the Vanguard Total Market Fund dips 10%, he sells some predetermined amount of bonds (I don’t know if it’s a number or percent offhand) to buy more of the total market at a “discount.” For someone with a relatively “conservative” strategy, he’s basically taking the opposite approach as you!

One last illustration, If you only invest at the peak over an investing career, since indexes have been available and this has been tracked (about 100 years), you still do ok.


Short version: when thinking about large cap index/total stock market funds, think of “dips” as “discounts” you can take advantage of.

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I lost 33% of my portfolio in the last 6 months. Yesterday I moved everything into some stable bond funds until this drop is finished.

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That is the worst thing you could have done. Way to lock in that 33% loss and remove any possibility of appreciation by moving it to a stable bond fund.

Real bonehead move there Dave Ramsey

Increase your percentage while stocks are on sale…..