Recently increased contribution rate to take advantage of price dips. With the way things are going, is there a point where it’s smarter to have the cash instead? We have a fairly healthy cash reserve. TY
Recently increased contribution rate to take advantage of price dips. With the way things are going, is there a point where it’s smarter to have the cash instead? We have a fairly healthy cash reserve. TY
My two cents, without knowing your age, assuming you are under 35??? I have been buying the market, on a weekly basis, in my retirement account, since June of 1997. I have been through the flash crash, dot-com crash, 2008 meltdown, etc. The healthy cash reserve is key. I have trading friends who are all cash in their personal accounts right now. My personal trading account I am 65% in stocks, 35% cash. However, my retirement accounts never stop buying on a weekly basis. One thing I have learned in that time is it is dang near impossible to predict the bottom or the peak.
Again, I think the cash reserve is key. I have 18 months of 100% of our living expenses in a cash reserve. Every spare dime I have goes into the retirement accounts on a weekly basis. FYI, I have a financial advisor that manages my retirement accounts.
What we cannot obtain from intelligence, we can learn from experience.
Did the same thing a couple months ago, like $250 extra a paycheck, and beginning to wonder. I'm 56 and now have a more conservative portfolio.
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I’m 42, have other money tied up in mod aggressive funds. Reserve pays the bills for many months, but stuff breaks, vehicles age out, property requires maintenance, etc. The what ifs make me second guess watching cash disappear.
I'm 53 and just went to a 30% contribution in my 401k and switched to a 100% stock allocation for the new money while the market is declining (I kept the existing 70/30 portfolio, so only new money 100% stocks). I have plenty of contribution amount left to hit my annual $27k limit, so I think it will work out fine. After New Years, I'll map out 2023, so I hit my annual limit while the market should be lower than where we are now.
It also looks like I might be buying another I bond, since the inflation rate is staying stubbornly high...
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We are in a down trend. The low support should be around 22-23,000 and I am expecting the market to slowly step down to that level. That being said, I am not a fan of the 401k. The only benefit IMHO is if the company generously matches your contribution otherwise I would long term invest my own money. Long term capital gains tax is significantly less than pre-tax 401k and you have more control over it the entire time.
I am 80% out of the stock market and got out several months ago. I am waiting to reinvest when the recessionary bottom presents and expecting it to bounce around 22,000 in the coming year or so. Could the market go lower, yes… but I am not that pessimistic yet.
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The biggest advantage of 401k for me is that I'm in a higher tax bracket now, compared to retirement, at least for me. I expect to live on much less than I make now, so my tax bracket should be significantly lower at retirement. Other vehicles also allowing for tax free income.
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If something doesn't give, we will start to have a few concerns.
Bonds, stocks and commodities simply aren't getting it done.
Real estate mixed. Up on our residences, killed on rental income.
The moratorium absolutely set us back on inflows vs outflows.
And now ... our residences are starting to wane in total value.
Of course, while inflation is raging, investments going yet lower.
The only "silver lining" is the CPI adjustment to our future SS.
We won't do without ... no debt, assets, retirement, able minds.
However, the odds of beans and rice have reached our kitchen.
Housing market here has come to a screeching halt causing prices to drop. Builders who were building condominiums are now listing them for lease. Gas is back to $4.00 a gallon, grocery’s prices are out of sight.
At least now CD returns are climbing. I know they’re not keeping up with the 8% inflation, but we are better off now than before. We too are debt free and only have a small position in the stock market. Cash is king right now and only buying essentials will get us past this.
What’s with this market? Fools gold?
Originally Posted by Bassin08
A few reasons it popped…the Australian Central bank raised interest rates less than expected, Treasury yields down, the labor market is weakening which could make the Fed back off on its aggressive tightening. And maybe instead of a .75 rate hike next time it could just be .50. Remember the “Soft Landing” scenario.
I took advantage of the 2 big up days and sold many positions to get ready for the next big dump and fire sale.
The amount that is down on my 401K is more than my contributions this year. Could have maxed out on I bond limit instead
Your buying cheap, at your age that’s good.The amount that is down on my 401K is more than my contributions this year. Could have maxed out on I bond limit instead
Cheap can get cheaper.
I actually bought a corporate bond ETF that matures in 9 years yielding 5.5%. The fixed income market is looking pretty good right now. Definitely going to take advantage of these higher rates.
stop playing with the contributions rate. You should try to max it out. You can always change how those contributions are invested at any time. Get into the consistent habit of spreading the max contributions through the year.
Old thread....but....trying to time the market is difficult, and nobody has a crystal ball.
Jack Bogle (Founder of Vangard) wisdom:
--Keep buying the total market.....and max out your annual contributions to your Retirement accounts, if you can.
--Set your asset allocation based on your individual risk tolerance and time horizon until retirement.
--Once you set that allocation, leave it alone, and stay the course.
--Dollar cost averaging, buying the whole way through, will pay off over time.
--Use Index funds, with low expense ratios.
--Look into the 3 Fund Portfolio Strategy, to reduce complication, and eliminate overlap of stocks.
The above strategy is not popular on this board, as it seems like alot of the investors here
invest in individual stocks.... I'm not smart enough for that....so I just "buy the whole market"
with Index fund investing. Several ways to the finish line! Good luck.
I'm a Boglehead Sean.....I just come here for the entertainment and the sentiment. I've had some private conversations with some looking to learn the basics and get started investing. I have a boring 3 fund portfolio (but it's served my wife and I VERY well).
We maxed it all out ... 401k, HSA and IRA, the latter when limits weren't an issue.
And we were conservative, consistent and tolerant. End result, we both retired.
Cristina is younger @ 57, she's happy with the efforts. Me too. We enjoy relaxing.
Our luck, zero. Our secret, none. We just kept the course & faith, stuck it out.
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