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Started By
Message
Should I move my 401k money to the cash option ahead of the election?
Posted on 10/27/20 at 10:19 am
Posted on 10/27/20 at 10:19 am
My 401k has the option of moving into cash holding. If things go to crap next Tuesday, I don't want to take huge hit. Thinking it might be a good idea until things settle down. Thoughts?
19
Posted on 10/27/20 at 10:20 am to tom1987
I find that whatever move I make will be the wrong one so I just leave everything alone.
Posted on 10/27/20 at 10:20 am to tom1987
When are you going to move it back in?
Posted on 10/27/20 at 10:22 am to tom1987
Are you retiring soon?
Posted on 10/27/20 at 10:26 am to tom1987
quote:
I find that whatever move I make will be the wrong one so I just leave everything alone.
Always.... this ^^^
Posted on 10/27/20 at 10:28 am to AUHighPlainsDrifter
quote:
Are you retiring soon?
I'm 56, so sometime in the next 10 years. Sooner rather than later, hopefully.
I have 4 different 401ks (3 prior companies and one current). I would then consolidate them after things settle.
Posted on 10/27/20 at 10:29 am to tom1987
I am not. The election is so close, the possibility of either outcome has already been priced in to the market. I don't expect disastrous results either way. By the time you consider things "settled down" the market may be up 20%. No one has a crystal ball.
Posted on 10/27/20 at 10:31 am to tom1987
So if you have an exit point identified, when would you enter back into the market? You said when things "settle down"...when will this be?
If you want to go to cash, nothing will probably change your mind, just know that history says you will come out behind. None of us can predict the future.
If you want to go to cash, nothing will probably change your mind, just know that history says you will come out behind. None of us can predict the future.
Posted on 10/27/20 at 11:33 am to tom1987
What does “After things settle” mean to you?
If the market does move downwards, what is going to make you feel like “This is the time to get in, all the downside has happened”?
If it doesn’t move downwards, are you going to move back in immediately, or are you going to “wait for the next pullback?”
Is your concern about a move downward predicated on a particular outcome of the election? If so, and an undesirable outcome is the result, what is going to make you change your mind to get back in?
All of these questions are don’t even take in to account your unique circumstances like your capacity and tolerance for risk, how much you have saved towards retirement, your other assets.
The more appropriate course of action is to determine as asset allocation that you can live with no matter what the environment and stick to it. If you can’t do that on your own, it may be time to go speak to a professional.
If the market does move downwards, what is going to make you feel like “This is the time to get in, all the downside has happened”?
If it doesn’t move downwards, are you going to move back in immediately, or are you going to “wait for the next pullback?”
Is your concern about a move downward predicated on a particular outcome of the election? If so, and an undesirable outcome is the result, what is going to make you change your mind to get back in?
All of these questions are don’t even take in to account your unique circumstances like your capacity and tolerance for risk, how much you have saved towards retirement, your other assets.
The more appropriate course of action is to determine as asset allocation that you can live with no matter what the environment and stick to it. If you can’t do that on your own, it may be time to go speak to a professional.
Posted on 10/27/20 at 12:17 pm to CrawfishOfWallstreet
quote:exactly. People worry about getting out, but don't have a plan for getting back in. You may get out in time, congrats. But that's half the battle.
What does “After things settle” mean to you?
If the market does move downwards, what is going to make you feel like “This is the time to get in, all the downside has happened”?
If it doesn’t move downwards, are you going to move back in immediately, or are you going to “wait for the next pullback?”
The market goes up, you get stuck waiting for a pullback. It goes down, you don't get back in because you think it'll drop further.
Nothing wrong to have cash as part of your allocation. Now 100% cash? That's cray talk. Even if you're retiring tomorrow.
Posted on 10/27/20 at 12:23 pm to tom1987
What if the market is up 10% by friday?
Posted on 10/27/20 at 1:09 pm to tom1987
I don't get the downvotes. This is a legit question.
I'm going to see how the market plays out till Thursday or Friday. Go to half cash then. On Monday, if the market starts to turn south, switch to gold if it goes down to $158 and then sell if it hits $180. If the market goes up after the election, move back to equities.
I'm going to see how the market plays out till Thursday or Friday. Go to half cash then. On Monday, if the market starts to turn south, switch to gold if it goes down to $158 and then sell if it hits $180. If the market goes up after the election, move back to equities.
Posted on 10/27/20 at 1:36 pm to Rex Feral
What does “turn south” mean to you? Any negative action, or does it need to be down a certain amount?
If the market is down and gold is not (I assume you are referring to GLD when you reference $158), which is a likely scenario, will you just sell into cash with the other half?
If you buy gold, and it moves sideways for a time while the market rallies, at what point will you sell gold to buy back in to equities?
If you buy gold, and it moves sideways for a time while the market drops, at what point will you sell gold to buy back in to equities.
By what amount, and how quickly, does the market need to go up before you decide that the risk is gone and you can safely buy back in? What is the possibility that time comes and you decide to wait for the next pullback to get back in?
I’m not picking on anyone, but I see this every day. Fear is not an investment plan. Timing without specific and actionable targets is not a plan. Feeling it out and “seeing how it goes” is not a plan.
Get an allocation that makes sense for your specific situation and goals, and leave it alone. Cash may indeed be an important part of that allocation, but the election should not be a determinant in that allocation, rather capacity and tolerance for risk and liquidity needs should be the driving factors.
If the market is down and gold is not (I assume you are referring to GLD when you reference $158), which is a likely scenario, will you just sell into cash with the other half?
If you buy gold, and it moves sideways for a time while the market rallies, at what point will you sell gold to buy back in to equities?
If you buy gold, and it moves sideways for a time while the market drops, at what point will you sell gold to buy back in to equities.
By what amount, and how quickly, does the market need to go up before you decide that the risk is gone and you can safely buy back in? What is the possibility that time comes and you decide to wait for the next pullback to get back in?
I’m not picking on anyone, but I see this every day. Fear is not an investment plan. Timing without specific and actionable targets is not a plan. Feeling it out and “seeing how it goes” is not a plan.
Get an allocation that makes sense for your specific situation and goals, and leave it alone. Cash may indeed be an important part of that allocation, but the election should not be a determinant in that allocation, rather capacity and tolerance for risk and liquidity needs should be the driving factors.
Posted on 10/27/20 at 1:37 pm to Rex Feral
It sounds like you have it all figured out. I am not saying that scenario will not play out in your favor, but if it does it will be pure luck.
Posted on 10/27/20 at 1:40 pm to tom1987
Those short dips aren't worth the chase. Just continue on your plan.
Posted on 10/27/20 at 2:45 pm to geauxpurple
quote:
I am not saying that scenario will not play out in your favor, but if it does it will be pure luck.
Which is exactly the problem.
There are two scenarios that could play out. The first, and most likely, is that he times the market and fails, missing out on gains. The second is that he times the market and wins because of dumb luck. But instead of realizing it's dumb luck, he thinks he's good at timing the market, and probably tries to do it again, in which case, he'll finally end up back at scenario 1.
Posted on 10/27/20 at 4:58 pm to tom1987
My best performing account is the one I’ve made maybe 3 transactions in 29 years.
Time in the market is greater than timing the market.
Time in the market is greater than timing the market.
Posted on 10/27/20 at 5:32 pm to Rex Feral
quote:
I'm going to see how the market plays out till Thursday or Friday. Go to half cash then. On Monday, if the market starts to turn south, switch to gold if it goes down to $158 and then sell if it hits $180. If the market goes up after the election, move back to equities.
your money your plan
but this is worst advice I think I’ve ever seen on the MT should anyone else here be inclined to follow it
Posted on 10/27/20 at 5:45 pm to tom1987
You will leave it and come back to complain 
Posted on 10/27/20 at 10:19 pm to tom1987
I wouldn't worry about it right now, but I'd move it to cash option entering the 8th year of Trump's administration. some sort of recession like correction is all but guaranteed. not bc of Trump but just bc of fear of unknown combined with Trump's spectacular economy.
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