Market Crash?

[Mimi]

H is worried that there will be a crash soon, like within a year.  I've told him over and over I'm not going to try to time the market.  But he keeps bringing up moving things to a stable fund.  I have <5% in individual stocks, and the rest are mutual funds though most aggressive/high risk.

Are you doing anything?  Like, moving to stable fund or lesser risk funds?

[Covergirl82]

I tend to be more risk-averse, so after the last market slide a few years ago, I moved about half of my balance to a money market fund and some to bonds. All of my contributions go to mutual funds that are aggressive, and from time-to-time I assess to see if I want to transfer any balance $ to the money market or bond funds. I just prefer to know that when the next market slide occurs, I will have some money in stable and low risk funds.

DH has all of his retirement in aggressive funds. I would prefer if he moved at least a small portion of the current balance to low risk/stable funds, but he hasn't done it yet.

I remember losing half of my balance in 2008, and having only worked/contributed for 4 years (in an entry-level professional job), I didn't have a big balance, but losing half of it still was not a good feeling. I can't imagine losing half of my balance now, and waiting years for the balance to get back to where it was.

[imojoebunny]

I don't try to time the market. Lived through the last crash, the dot.com bubble, and the 90's. If you take your money out, and the market goes up, your left behind, if you take it out, and it goes down, you have a buying opportunity, but many people wait to long to get back in the market, and keep it in cash, while it goes back up, and then you are in the same spot, but without the upside potential, if they are wrong. Short of having some special knowledge, other's don't have, unless you will need the money in the next several years, I would continue to invest in the risk profile that makes you both comfortable long term, which may mean a compromise, where you adjust some things to suit his risk tolerance, while keeping some at yours.

[goldengirlz]

We’re staying the course. It’s the nature of investing. There will be a recession, we’ll lose money but — if history is any indicator — the market will rebound higher than it is now. We only invest money that we don’t need for the foreseeable future (and we still have three decades until retirement.) The best way to make money in the market, long-term, is to take a set-it-and-forget-it mentality.

ETA: In terms of risk, we tend to invest mostly in ETFs that track the market. I do need to reallocate some of the money I’ve been keeping in company shares.

[archiethedragon]

I do not time the market.

I have a long term asset allocation strategy that I review periodically to make sure it still makes sense and I comfortable with it. If needed I tweak my allocation to match my strategy. Other than that I do to adjust that allocation to try and time the market or in response to any news or feelings. It can be really tempting to think about doing so, but I remind myself that timing the market is not a winning stategy.

[atarianna]

Our financial adviser will post blog posts to his clients with current market conditions and predictions. He will occasionally recommend moving our TSP to a more or less aggressive fund based on market conditions.

My 401k has been in the least aggressive fund since he recommend moving there. I haven’t been confident enough in the last year to move it back to a more aggressive fund.

[farmvillelover]

Last week right before Thanksgiving I sold about 10% of our holdings (mostly in retirement accounts but some in taxable) that were large nasdaq and S&P funds (FCNTX, FNCMX and FXAIX) so we'd have some cash to buy if the opportunity arose.  I've also moved some of the cash we just had sitting in savings to our brokerage account, again, to have the immediate cash available to buy when there's a good opportunity.

I don't know if that's what you call trying to time the market.

[k3am]

I keep hearing speculation that the market is going to crash within the next year. For at least a few years, probably longer.

I also keep hearing that CA is due for a major earthquate in the next year or two. For at least 20 years.

Inevitably, those things will happen, and someone will say they "called it" but yeah... so far, those crystal balls aren't working so well.

[Mimi]

Dec 4, 2019 10:01:23 GMT -5 Covergirl82 said:

I remember losing half of my balance in 2008,

That's what H keeps thinking of.  I told him I know it sucks but I just won't know when to jump back in.  Or, did I jump out too soon, etc.

Dec 4, 2019 10:12:12 GMT -5 imojoebunny said:

I don't try to time the market. Lived through the last crash, the dot.com bubble, and the 90's. If you take your money out, and the market goes up, your left behind, if you take it out, and it goes down, you have a buying opportunity, but many people wait to long to get back in the market, and keep it in cash, while it goes back up, and then you are in the same spot, but without the upside potential, if they are wrong. Short of having some special knowledge, other's don't have, unless you will need the money in the next several years, I would continue to invest in the risk profile that makes you both comfortable long term, which may mean a compromise, where you adjust some things to suit his risk tolerance, while keeping some at yours.

I totally agree!  This would also require too much time/effort and worry trying to decide when to jump back in.

Regarding needing the money in the next several years, is that like 5yrs?  10 yrs?  The kids' 529 are also in aggressive funds.  We'll need it in 9 and 11 yrs.

[imojoebunny]

I would keep the kids money invested at higher risk, not crazy, risky stocks :-), but something with more risk reward than bonds or funds heavily in bonds. My DD goes in 4.5 years, and currently has enough for a state school. If the market goes down, she will have to have some student loans, if it goes up, she could easily have enough for a private school. It is a gamble, but either way, she can get an education.

If we had invested in bonds or something with a lot less risk, she wouldn't have near enough now to go to a state school and would still be in the position of having to take student loans, so the end result of a down market, with the higher risk, is about the same by the time she goes to college, but the upside is that she could have enough to go pretty much anywhere.

[ohgillian]

This is the longest expansionary period in US economic history. Of course there's going to be at least a market correction, if not more. But no, it doesn't change my investment strategies.

[ellipsis]

imgur.com/gallery/BlK4jzM

[sloan]

Nope. This reminds me though that I DO need to rebalance, and so it’s possible you may need to do that to get to your target asset mix. As stocks outperform bonds in a good market it’s easy for an 80/20 stock/bond ratio to creep up to 90/10 or higher, and then have a more aggressive portfolio than you want.

[farfalla2011]

Are we married to the same person? I keep hearing that conversation repeatedly for the last several years 🤦‍♀️

I'm in the keep on keeping on camp. Yes there will be a correction since our timelime to use the retirement investments is 15+ years, but as certain as I am that there will be a correction, there will also be a subsequent recovery like there is every other time.

[mccallister84]

Dec 5, 2019 15:09:37 GMT -5 ellipsis said:

imgur.com/gallery/BlK4jzM

Thank you for sharing this!