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Started By
Message
Getting out of the market before election
Posted on 10/9/20 at 5:46 am
Posted on 10/9/20 at 5:46 am
I know the general opinion of trying to time the market, but was wondering the boards thoughts on this scenario...I work with a guy who is 3-4 years from retirement, yesterday he moved all his 401k from a 2025 target fund to a 2010 fund. said he will move it back after election is settled. Has caused a lot of discussion at work with people on both sides (but most are NOT investing savvy). Im not sure how i feel.
13
Posted on 10/9/20 at 6:00 am to tigerlife00
quote:well he will be protected in the case of a crash or large correction but the reality is that what the market does over the next month shouldn’t have much weight on what his portfolio has done over the past 20-30 years. So I say leave him be if the old bastard just wants some peace of mind
said he will move it back after election is settled.
Posted on 10/9/20 at 6:31 am to tigerlife00
What happens if the market spikes as soon as Trump is re-elected?
Posted on 10/9/20 at 6:31 am to tigerlife00
That’s the consequence of not having a solid financial plan. A good financial plan accounts for corrections in the market and is designed to survive through many disasters.
Right now the Fed is easy, and earnings are recovering from Covid, easy money and improving earnings are the recipe for market growth.
Additionally over the last 12 presidents, all have had positive market performance except for Bush and Nixon. All 12 had positive GDP growth. To further that point, 70% of the US economy is consumer spending. People aren’t going to stop spending money because we have one president or another. People are going to buy homes, buy the new video game consoles for Christmas, and buy cars. As long as there are greedy Americans, we will be okay.
Your largest risk for large downward market swings is if this goes contested and we don’t have an answer until January. (Low probability).
I’ve found that most people’s issue is the possibility of increased taxes on 401k withdrawals when someone is retired. In that case, I’d suggest your co worker look at Roth conversions instead of putting money into a 2010 fund. Pay the taxes now when we are in a historically low tax environment.
Right now the Fed is easy, and earnings are recovering from Covid, easy money and improving earnings are the recipe for market growth.
Additionally over the last 12 presidents, all have had positive market performance except for Bush and Nixon. All 12 had positive GDP growth. To further that point, 70% of the US economy is consumer spending. People aren’t going to stop spending money because we have one president or another. People are going to buy homes, buy the new video game consoles for Christmas, and buy cars. As long as there are greedy Americans, we will be okay.
Your largest risk for large downward market swings is if this goes contested and we don’t have an answer until January. (Low probability).
I’ve found that most people’s issue is the possibility of increased taxes on 401k withdrawals when someone is retired. In that case, I’d suggest your co worker look at Roth conversions instead of putting money into a 2010 fund. Pay the taxes now when we are in a historically low tax environment.
Posted on 10/9/20 at 7:16 am to tigerlife00
In the long run, we will all be dead.
Saving/investing phase is best done with autopilot.
It’s a more complicated issue when you are entering the withdrawal phase. Capital loss risk is real. So is the risk of the nest egg running out before one dies.
Being 100% equities is probably too much. Being 100% cash is probably too little equity exposure.
The old days of just renewing CDs with a decent yield are gone.
Saving/investing phase is best done with autopilot.
It’s a more complicated issue when you are entering the withdrawal phase. Capital loss risk is real. So is the risk of the nest egg running out before one dies.
Being 100% equities is probably too much. Being 100% cash is probably too little equity exposure.
The old days of just renewing CDs with a decent yield are gone.
Posted on 10/9/20 at 8:02 am to tigerlife00
quote:
yesterday he moved all his 401k
The real discussion is should we stop contributing to a pretax retirement account, with all the debt the government(Trump is increasing the deficit also) is running up will our tax brackets actually be lower in retirement?
Posted on 10/9/20 at 8:34 am to 8thyearsenior
quote:
The real discussion is should we stop contributing to a pretax retirement account, with all the debt the government(Trump is increasing the deficit also) is running up will our tax brackets actually be lower in retirement?
Considering you have much better control on when you make withdrawals and things like company matching. Really no alternative...
Unless you have access to a Roth 401K
Posted on 10/9/20 at 8:38 am to Upperdecker
quote:
What happens if the market spikes as soon as Trump is re-elected?
I really hope that is something we need to consider but I dont see it happening and Im Pro-Trump. The media is controlling this election.
Posted on 10/9/20 at 8:43 am to EveryoneGetsATrophy
if trump is not re-elected it will be nobody’s fault but his own
Posted on 10/9/20 at 8:45 am to tigerlife00
He likely made a mistake. It's pretty clear the market has priced in a Biden win. The market isn't crashing if Biden wins and everyone thinking a democrat win will crash the markets is going to be left behind.
I am very conservative and pro trump
I am very conservative and pro trump
Posted on 10/9/20 at 8:49 am to thatguy777
adding you to my follows list of smart investors dude. cya
Posted on 10/9/20 at 9:00 am to thatguy777
quote:
It's pretty clear the market has priced in a Biden win
Please explain how one comes to this conclusion....while remaining politically objective.
Posted on 10/9/20 at 9:02 am to Mr Perfect
Posted on 10/9/20 at 9:03 am to buffbraz
For the younger crowd, a large correction would be a good time to INCREASE your contributions, not go to cash.
Posted on 10/9/20 at 9:04 am to tigerlife00
I made a similar move yesterday, but for me it’s more about concern for a contested election. It’s easier to preserve capital than it is to create it. Also spent some time researching October’s in election years.
Posted on 10/9/20 at 9:22 am to buffbraz
quote:
For the younger crowd, a large correction would be a good time to INCREASE your contributions, not go to cash.
listen to this man
buyING and holding is how you get rich
Posted on 10/9/20 at 9:24 am to Douglas Quaid
moscow persuaded trump to proclaim stimmy deal negotiations were done when trump needed it for election. he did this bc gop moving away from trump and trying to save Senate now.. moscow is a slime ball and played trump. look for trump to start attacking moscow soon. that's my read dude
Posted on 10/9/20 at 9:31 am to Mr Perfect
I think you are spot on.
Mitch is already complaining about RNC fundraising for contested senate seats. They’ll start eating their own soon enough
Mitch is already complaining about RNC fundraising for contested senate seats. They’ll start eating their own soon enough
Posted on 10/9/20 at 9:31 am to Mr Perfect
(no message)
This post was edited on 10/19/20 at 12:40 pm
Posted on 10/9/20 at 9:34 am to TheWalkoff
hey dude. that's fine. sry to upset you.
I said this just my read on the situation. never said it's 100%
I said this just my read on the situation. never said it's 100%
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