[CoachKandSportsguy]

Those thinking of moving some equity in your portfolio to cash would not be wrong, with the option of re-investment later. . My 401K has been in zero equities since last August, waiting for about 3000 on the SP500. Don't fall for the stocks always go up or always return 8% , including about 2-3% dividends, giving about 6% price return, from any point in time. your time is limited, you do not have income to make up for shortfalls, unless you have a federal government pension. . .

The graph below is the simplest valuation metric of equity valuation to sales of the S&P 500, best would be enterprise value to sales but sometime later. With a 30% drop from here, at 6% price return, it takes 6 years to get back to the same price. . So selling high at these levels, may save you 6 years of retirement savings gains. .

However, I am just some rando fictishus poster who has ever texted with one of the nice people on this board, so make your decision and own it. . .

trading guy

[CoachKandSportsguy]

and be sure to have your wealth protected well enough to pass on to your offspring, your children and grand children as they will need it.

If you don't have wills and trusts, your wealth may not get to your children and grandchildren who need it. My aunt and uncle had a friendly next door scammer get some of their wealth in the 2000's

[Stu from NYC]

We all have different risk tolerances.

Historically when there is a correction the market comes back strong and continues on a long term 8-10% path of price appreciation.

Also understand why you would have taken your 401 equities and put them in cash but you did lose a lot of appreciation by doing that.

Not saying you are wrong but I tend to be somewhat more aggressive than most and have faith in our economy over the long run. Having said this over the past few years more of my mutual fund investments have gone to more conservative equity funds like value and dividend yield funds.

[MrFlorida]

Wall Street Roulette.

[Babubhat]

Doesn’t matter until you need to cash in. Most leaving it to kids anyway. Get your step up in basis and screw tax man

[valuemkt]

Zero money in equities since August ? Yea you;re a financial genius . NOT

[CoachKandSportsguy]

Originally Posted by Stu from NYC

We all have different risk tolerances.

Also understand why you would have taken your 401 equities and put them in cash but you did lose a lot of appreciation by doing that.

I tend to have faith in our economy over the long run.

The comment is not a reflection of the economy, this is a valuation issue. The economy will still run between 1-3% long term. My comment is that the valuation is very, very extended relative to the economy. kind of like a 350K house going for 700K 12 months later. . . when nothing changed other than very low interest rates and high equity prices to assume a great retirement forever. . its called recency bias, versus the historical view which i displayed in the graphs. . that is the point, the recent market is not historically normal, but truly abnormal.

When I sold, the SPX was 4520, today its 4431, not sure how you can state that I have lost a lot of appreciation.

I was out of the stock market, 100% in cash in June 2007 prior to the housing market crash . . . the key is to avoid big market drawdowns, which has a potential to happen right now


But also relate the current valuation to the historical market highs, and realize that the Federal Reserve has had a lot to do with the stock market returns because of the deflationary effects of technology. . . ie, they didn't have to worry about consumption inflation, which is starting to move up and then flatten, depending upon the price of energy, and minimum wage. . .

The ultra best scenario is to have the Dec year end equity prices as low as possible for minimum RMDs but that goes against performance marketing of investment management.
The worst scenario is to have the market at yearly highs in Dec and then be down when you decide to take the RMD. . just something else to think about when to take the RMDs

[Babubhat]

Past performance in no guarantee of future returns. Life has many risks

[rsmurano]

Have you heard the saying: “pigs get slaughtered” in relation to the stock market?
Nobody can time the market! Yes the market will eventually climb over time, and yes, there will be volatility.
Normally I have always stayed in the market thru the last 3 big downturns but starting this year, my gut is telling me to get out which is what I did. Still have a 1/4 of my portfolio still in the market mainly because of tax consequences of selling.
If I miss out on gains this year, I can live with that. But, if the market has a correction, when I jump back in (can’t time the market), I’ll be way ahead

[toeser]

By almost any measure, the overall market is seriously overpriced. However, this does not feel like a market top to me. It's not crazy enough. I think the market may have another 15-25% in it over the next couple of years. However, when this market does top, I think it will be a major-major top that won't be breached again for a very long time.

When the market topped in the late 1960's it did not progress to new higher levels for a decade. I think we will be looking at that again. There are consequences for the Fed and Congress mismanaging stuff this badly.

[Travelhunter123]

Originally Posted by CoachKandSportsguy

Those thinking of moving some equity in your portfolio to cash would not be wrong, with the option of re-investment later. . My 401K has been in zero equities since last August, waiting for about 3000 on the SP500. Don't fall for the stocks always go up or always return 8% , including about 2-3% dividends, giving about 6% price return, from any point in time. your time is limited, you do not have income to make up for shortfalls, unless you have a federal government pension. . .

The graph below is the simplest valuation metric of equity valuation to sales of the S&P 500, best would be enterprise value to sales but sometime later. With a 30% drop from here, at 6% price return, it takes 6 years to get back to the same price. . So selling high at these levels, may save you 6 years of retirement savings gains. .

However, I am just some rando fictishus poster who has ever texted with one of the nice people on this board, so make your decision and own it. . .

trading guy

Timing the markets is difficult at best. If you are “lucky enough” to sell at the height of the market, when do you buy back in? There is a scenario where you sell low and buy high
If you are investing your funds at 1% waiting for the market to bottom; you are losing money to inflation

[FredJacobs]

I always recommend not making your paper losses into real losses. The market always comes back. If you couldn't predict the downtrend then you can't predict when to reinvest in the uptrend. Market timers generally lose. Same thing if you react on a bad market day. "Oh, the market lost 500 points today. I'm going to move everything into a money market." Next day, the market goes up 400 points, the day after, another 200 points and continues up. And, you can't get back in for 30 days or you will have a "wash sale." My best advice - stop being a day-to-day money manager. If you are in mutual or index funds, let the professionals handle your investments.

[FredJacobs]

My will reads, "Being of sound mind and body, I spent it all!"

[Boffin]

Originally Posted by CoachKandSportsguy

Those thinking of moving some equity in your portfolio to cash would not be wrong, with the option of re-investment later. . My 401K has been in zero equities since last August, waiting for about 3000 on the SP500. Don't fall for the stocks always go up or always return 8% , including about 2-3% dividends, giving about 6% price return, from any point in time. your time is limited, you do not have income to make up for shortfalls, unless you have a federal government pension. . .

The graph below is the simplest valuation metric of equity valuation to sales of the S&P 500, best would be enterprise value to sales but sometime later. With a 30% drop from here, at 6% price return, it takes 6 years to get back to the same price. . So selling high at these levels, may save you 6 years of retirement savings gains. .

However, I am just some rando fictishus poster who has ever texted with one of the nice people on this board, so make your decision and own it. . .

trading guy

The average length of a bear market is 289 days, or about 9.6 months. That’s significantly shorter than the average length of a bull market, which is 991 days or 2.7 years.

[Waltdisney4life]

Peter Lynch said more money is lost trying not to lose money!!