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Originally Posted by Becca9800
I'm absolutely ignorant when it comes to the stock market yet that's where all the money I have is nesting. It's in a 403b, encouraged and supported by my former employer. I'm w Lincoln Financial, with an Aggressive Retirement portfolio. I've not a clue. Please be kind now, I know I've been not too bright but I'm here now asking for your advice. So please be nice. I watch my value go up, and go down, YTD I'm up. It's all I have and it ain't much, I cannot afford to lose it in a crash. But I don't want to miss any gains either (greed, I know. It's a matter of knowing I'll need gain to be comfortable 10 years from now). I keep reading the market will crash soon and it frightens me. I need a financial guru to guide me. I've been to two advisors and received conflicting advice. Do I pull out or do I stay and run the gambit? What's an 'ol girl to do? Thanks so much in advance.
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There are so many variables, and since no one here knows your situation or age, answers are perfect, or perfectly wrong. The allocation in your fund is not what I would pick, but an advisor picked it based on your fear of the future value, versus the goals of maintaining original value. Risk. The allocation you have is like, bonds are blah but safe, stocks are less safe but have been growing, and stable or cash is like, useless but quickly available? So leave it all where it is and start doing some reading on allocation choices over time. Then decide to change if you want. But to your original question, the stock market is long overdue to "correct" meaning go down some, or a lot. The main reason it has not is that no one wants to be in Bonds. They pay historically low interest. But, if I had a less foggy crystal ball, I can predict with certainty that eventually inflation is going to come home to roost due to the excess spending and stimulus money in the USA. When it does (it is already) and the Fed tightens money supply to try and check it, Bond Rates will rise. Fear will begin to move money from stocks to bonds, and the market will "correct" for 6 months to a year. When? Well it is overdue and the crystal ball is foggy. If you are scared of all this and can't do more research, consider moving some investments out of mutual funds and into direct stock ownership. Allocate that money to blue chip dividend payers. These will pay you dividends regardless of the ups and downs of the individual stock price. Meaning, let's say you put 5000 in pretend stock XXXX that buy 500 shares, each paying $1 dividends annually. If in five years the "value" dropped to 3,000, you still will get $500 annually in dividends because you still own 500 shares. If that same 5000 was put in mutual funds that tanked 30 or 40%, you will own less "shares" in the fund, and get less dividends. I dislike Mutual funds, but understand that do more asset diversification. But it comes at a cost (fees) and never, ever, fare will in a correction. And when the market recovers again, you never fully recover. Back to stock XXXX, you owned 500 shares as the price went up and down, and the only opportunity you los, is selling at a profit if you just sit tight.