401 K took a beating!

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Well I went in to see the man today when I got back in town. Walked in to see this...„on his face. He turned the monitor 180 and told me that on feb 7 we reached the goal and he consolidated all 3 funds into an income producing fund short term. Paranoid for no reason!
I guess that's how it goes when your on the set it and forget it mode.
He mentioned the January effect a couple times and supposedly it worked very good again this year. Not real sure what that's all about.
 
Originally Posted by Al
I don't know why folks spend 3%+ on an advisor
[/b]


Probably depends on the size of your portfolio and your personal needs.
I am not sure a lay person would be aware of the number and variety of investment vehicles and how they relate to a given investor.
I know that what I don't know will cost me.
 
Jeff I don't even know what I don't know!
Lol
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Originally Posted by Al
I don't know why folks spend 3%+ on an advisor


I'd bet lots of people are easily unnerved about money and investment decision or options. Just guessing but their peace of mind is that bit they are paying for.
Heck, there are people who wont' go buy a car but hire a shopper broker or buying group.


Originally Posted by P10crew
Well I went in to see the man today when I got back in town. Walked in to see this...„on his face. He turned the monitor 180 and told me that on feb 7 we reached the goal and he consolidated all 3 funds into an income producing fund short term. Paranoid for no reason!
I guess that's how it goes when your on the set it and forget it mode.
He mentioned the January effect a couple times and supposedly it worked very good again this year. Not real sure what that's all about.


Link here, short answer below.
I don't know any of the is stuff but this is from a quick search

https://www.investopedia.com/terms/j/januaryeffect.asp

"The January Effect is a hypothesis, and like all calendar-related effects, suggests that the markets as a whole are inefficient, as efficient markets would naturally make this effect non-existent. The January Effect seems to affect small caps more than mid or large caps because they are less liquid."
 
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I have studied technical analysis for a little more than 20 years and have a basic understanding of market movement. I would agree its extremely hard to time tops and bottoms but it can be done with a very experienced trader. It takes lots of work and study to understand and most won't take the time.

The buy and hold camp works for those that can afford to do it and are not ready to retire. If you are nearing retirement my suggestion is to look at a decent investment that will shield from a market correction. We moved our funds to safer choices expecting a correction. I also have some that I move in and out based on what I see. Best of luck.
 
So, to answer the original question I was following a plan and moved my money on last Thursday, and ive been up and doing very well this past week, I too don't know when to dive back in, My plan that ive deviated from would have lost me a fair amount. Im very curious and semi anxious about moving again until we start seeing green days again...I think im going to hold tight until Tuesday/Wednesday. I hope we have a better picture by then.
 
JeffKeryk,

Some financial advisors are great.... others are flat out crooks.

Some people don't have the time (or want to) manage and invest their money. I know a few doctors / surgeons that don't what the hassles. They feel better when someone is ‘holding' their hand. Sometimes it's works, sometimes it ends up a financial disaster.

I know a guy with almost $5M invested (no joke) and he manages every penny. He has average intelligence and trusts nobody.

Some pro athletes let a total stranger manage 100% of all their financial matters.
 
Originally Posted by Mr Nice
JeffKeryk,

Some financial advisors are great.... others are flat out crooks.

Some people don't have the time (or want to) manage and invest their money. I know a few doctors / surgeons that don't what the hassles. They feel better when someone is ‘holding' their hand. Sometimes it's works, sometimes it ends up a financial disaster.

I know a guy with almost $5M invested (no joke) and he manages every penny. He has average intelligence and trusts nobody.

Some pro athletes let a total stranger manage 100% of all their financial matters.


Mr. Nice - Let's just say I know someone who has more invested than your guy...
I can tell you the investment vehicles that have been presented to me are far beyond what I could know of, much less understand.
Having said that, I make the decisions based on their advice (good), what I want to do (maybe not so good) and what I know (ain't much).
I have worked with Fidelity, Schwab, independents and others to a lesser degree.
At this point, I am happiest with Schwab and they have earned the bulk of my portfolio.

Just my 2 cents.
 
Call me stupid (and maybe I am) but this little downturn has me not in the least concerned.
Been on this earth for too long, seen it before, been there, done that. Even today, there are a lot of other factors that used to be not around as much.

Anyway, heck, I didnt reduce my exposure the week the of the"correction" I increased it, not only that but on Saturday I increased my 401k contribution.
Here is why (personal opinion, no right or wrong, not preaching to anyone)

1. Markets are currently valued high and there seems to be a new historical high in the way companies are valued, bottom line, there is an endless supply of 401k and Roth money from corporate employees flowing in, its a non stop input and the money goes mostly into stock funds, stock funds must invest the money and can not hold cash no matter what the market is doing. Its an endless supply entering every minute of the day.

2. We just corrected 10% I can not for the life of me believe Corona is going to affect any company more then 10% of their profits and quite honestly, except for the temporary physiological impact on the consumer (if any) I think soon in the short term Corona will not even be on the radar.
I mean, we already have Tim Cook saying their factories are now back to being fully staffed.

3. Sooner or later, the market rebounds, over the last few decades it rebounds faster then ever because of the never ending supply of money from 401k's
To me, there isnt any danger and I am not the least concerned. If the market doesnt rebound, well then we will just be like Japan for the last TWENTY five years and go no place. If so, well then, game over, it is what it is, for me, my retirement or well being is not tied up in the market but dont get me wrong, its a nice plus to have.
Diversification is key.

It will be an interesting week, personally? I think this will all blow over in a matter of days rather then weeks, but no one knows ever for sure.

Ok, one pet peeve for some people (now I am preaching:eek:)

You cant lose money in your 401k because you never had the money, so dont cry about it.
When you see your 401k doing so well its called an unrealized gain, why? because you never took the money out and the money doesnt exist until the day you get it.
When you see your 401k doing really bad, same deal.

Dont get me wrong, its suc** to be down but dont be upset because you "lost money" you never had the money, your rolling the dice and hoping that the day you go take it out its there.
If that concerned people can invest in their 401k in REAL property, if you cant touch it, its not real, real estate is an option for some and boy there is nothing like the word "real" not imagined, not on paper but something you can stick a shovel into.

In the meantime, hang tight, Im not saying it cant get messy or worse, just is my state of mind and glad my wellbeing does not exclusively belong to the stock market.
Because one thing for sure, moving into the future, the Fed printing so much money, the Fed again, borrowing so much more, soon, using interest rates to stimulate the markets will be gone, we have gone from 7% to 2% in good times, leaving almost nothing left to reduce except the other 2% down to 0, then what? Yup

Just one other thing, the market climbed so rapidly this past year, this decline has only brought us down one year to 2019 levels.
Anyway, anyones guess it as good as mine, I have no idea what will happen, just an excuse for what I am doing, so flip a coin and lets get going *L* Heads is yes, Tails = no

Think about it, it took TWENTY FIVE years for Japans stock market to get back to its levels of 1990 proceed with caution, anything can happen, me personally, I could be very wrong, but think we have no place to go but up. Good news is, Im not heavy relying on the markets performances where it makes it or breaks it for me so I take anything I say with a grain of salt or less.
 
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Good points.

A additional thought. If you think your money is safe in a bank or under a mattress think again. Inflation will eat away at the value of money.

Take $100,000 for example. A decent sum by most folks. Twenty years ago what could you buy with that money? Come back to today and ask that same question.
 
^^YES^^ Agree, though there was a time, when you could get 6 to almost 10% returns on CDs at a bank but thanks to Uncle Sams debt load that no longer is true.
I say this for one reason, growing up, my mom used her investment money and stayed only with banks, my dad invested in the markets.
Guess who won by a WIDE margin, yeah, my mom, saving in Cds, (much higher rates then) compounding interest year after year.

The good news was, I learned a lesson from the both of them, being diversified does not mean being diversified just in stock market investments.
It means being diversified in real property, and yes, to some degree Federally insured instruments.

Im optimistic about the future but I have to admit look back at a country like Japan, how that market stagnated for so long and sometimes ,sadly I look around my own country (USA) and wonder about the crazy political headwinds here. (please no politics, just talking about the economy)
 
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Diversification is key.

I'm old enough to remember CD rates in the higher teens. That was an unusual environment though. Mortgage rates were up there as well.
 
I once had a 12% CD … but mortgage rates were that high too back then …
If you were old enough to already own your home, all good (I was not) …
 
Originally Posted by PimTac
Diversification is key.

I'm old enough to remember CD rates in the higher teens. That was an unusual environment though. Mortgage rates were up there as well.


Yes, I remember my brothers first house, he was paying 16% ish on a No Doc mortgage. The thing about that was over time, you could refi. He was in a five year variable rate plan and it worked out perfect for him as the rates dropped every five years.

Agree unusual, at the same time weren't we always 5% or better? instead of the 1.65% to 2% now ? *L*

But one other thing about mortgage rates (I have a pretty extensive real estate background) to the buyer the payments are always the same. Bottom line, the public can only afford a certain payment, that will determine the selling price of the home. So high interest rates = a lower purchase price for the buyer. Low interest rates = a higher purchase price for the buyer.
So all this whining about high home prices are only because interest rates are so low. The homeowner wins.
If interest rates were sky high, homes would be much cheaper, then the buyer and bank wins (if the buyer can refi years down the road)
SO home prices are not at all high, home prices are what buyers can afford or the homes would not sell.

I as a buyer would much prefer paying a higher interest rate and getting the property cheaper then a low rate and property much higher.
You have to live with the purchase price for your lifetime, you dont have to live with the interest rate.
(just my personal choice)
 
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Originally Posted by RedOakRanch
Nothing to worry about yet, all the recent losses have only taken us back to the levels of about 5 months ago. This is a great opportunity to buy in on the way down.


Hello. The Dow Jones is 25,409. The first time it hit that was Jan, 12, 2018, more than 2 years ago. My read is that two years of gains have been wiped out. ie: Except for dividends the money invested prior to 2018 did nothing for two years.
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Originally Posted by Snagglefoot
Originally Posted by RedOakRanch
Nothing to worry about yet, all the recent losses have only taken us back to the levels of about 5 months ago. This is a great opportunity to buy in on the way down.


Hello. The Dow Jones is 25,409. The first time it hit that was Jan, 12, 2018, more than 2 years ago. My read is that two years of gains have been wiped out.
smile.gif



On March 4 2019 the Dow Jones was 25,450 and 25 cents
On Feb 28th 2020 the Dow Jones was 25,409 and36 cents (pretty darn close)

Lets take it a step further on May 27th 2019 (only 9 months ago) the Dow Jones was 24815.04
Fridays close of 25,409 on Feb 28th 2020 makes the Dow Jones still 594 points (and 32 cents) higher then just nine months ago. I dont consider this a big crash like mass media makes it sound.

So to simplify (sometimes I lose myself in my thoughts*L*) as of Friday 2/28/20 the stock market is 594 points (and 32 cents) higher then it was 9 months ago on 5/27/19
This recent market advance truly was a very short term 10% recent climb over less then a year and the recent decline brings us back to that level, which is more like 9 months loss rather then the year I previously said. Not bad at all.

smile.gif
 
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