So do we jump back in the market with our 401`s?

[slater71]

Or is this only the calm before the storm?

[NYC_SKP]

1. IMO, fuck that scam.

fool me once...

[Vincardog]

2. Only gamble what you can afford to lose

[marybourg]

3. Sure. This is a great time to buy

high, especially if you previously sold low. Hint: pick an allocation of stocks to bonds ( preferably in low cost index funds) and keep investing without regard to what the market is doing. You cannot time the market!

[onehandle]

4. Buy Apple Stock. nt

[southernyankeebelle]

5. Don't you find it amazing that republicans are suppose to hate social security but that has

been the only secure benefits we have. I say leave that alone. If people want a separate pension plan then let them do it through the government where they can't touch it. When the person dies they get it all back what they put into it. Like an insurance. But through the government.

[doc03]

6. I never jumped out and my IRA has done very well since Obama took

office. If you jumped out of the market back in 2009 your ship has sailed. You can't time tne market.

[Warpy]

7. Well, you can, sort of

If you throw money at it when investors are in full panic and the "experts" are dooming and glooming full blast, you'll be buying low.

Jumping back in now when it's high is not smart if your nest egg is small, you'll do better in an insured money market until the stocks come back to earth for a while.

I didn't jump out in 2008/9 either because most of my stuff is income generating and nothing else is giving much of a return. My income didn't go down until a year ago when hoarding cash instead of paying their stockholders became policy and then it didn't go down much.

I've actually made about 20% more than I inherited and the market has been essentially flat.

Although everybody hates the risk of a rigged market, it's still the place to be, especially if you're looking for income.

[JDPriestly]

52. Depends on your age. If you are young, maybe you have the time to sit out a bad

market. But if you are older, you do not have that time.

Of course, it also depends on how much money you have. We are talking about 401(K) funds -- which are specifically saved for retirement. An older person never knows when he or she might need that money. Unexpected health care costs or other emergencies -- that's what the 401(K) was saved for.

So, no. When you get to a certain age and you don't have a lot of money, you don't "invest" in stocks. It is too much of a gamble.

[slater71]

8. Thanks for your informing comments.

[hollysmom]

9. I was scared of Bush and pulled out spring 2001.

locked long tern CDs at 6 and 5 %. unfortunately they are coming due now. put some in a long term annuity at 3.5 percent last week still have a few more at 5%. When money came due in the past put it into collectible coins. They tend not to lose their value if silver or gold.


Here is some strangely little known information. If you are 59 1/2 or older. you can change your retirement cds (IRA, SEP. etc.) every year, despite the term of the CD, so I always put them in for the longest highest amount, knowing I can change next year if interest rates go up.

[A HERETIC I AM]

15. Your second paragraph is a bit misleading

Here is some strangely little known information. If you are 59 1/2 or older. you can change your retirement cds (IRA, SEP. etc.) every year, despite the term of the CD,

I have a feeling what you are referring to are "Brokered CD's". These are CD's that one can buy and sell just like a bond. There is no need to hold such a CD until maturity. The thing is, this applies whether or not you are 59 1/2. These can be bought through a broker either inside an IRA or in a regular, taxable investment account.

To my knowledge, there is no provision in the IRS code describing Tax Deferred accounts that changes a banks ability to stipulate the terms of a time deposit, which is what a Certificate of Deposit is.

[hollysmom]

18. These are bank CDs

For some reason people don't seem to know about this and this includes the people in the banks, If they say it is not so, you have to have them call their retirement department.

My sister, the CPA, never heard of this either and did not believe me until she went to her bank and they allowed her to change hers. Right now pretty much all of managers of the banks in my city (all of which I have one or more accounts at) know about it. One person told me, and then I checked with each of my banks to verify. It is not a state rule because people in NY and North Carolina have also checked.

I don't know the name for the rule. I can call the bank and ask tomorrow if you want. All I know is that it works and is federal. As I said, don't take my word for it, check with your bank and if they never heard of it, have them check with their retirement department. It works for my IRA, SEP and KEOGH accounts.

[A HERETIC I AM]

22. ALL CD's are Bank CD's

Again, what you are referring to are "Brokered' CD's. This simply means they are tradeable. You don't have to hold them to maturity.

I do not doubt what you are saying - that you can 'change' them as you say, but this isn't particularly special nor is it a secret, it's just that when most people think of a Certificate of Deposit, they think they have to hold them until maturity. When you change them, all you are doing is having the bank buy it back to resell it to someone else or keep it in their own inventory.

You don't have to call for my benefit, but instead, ask if they are indeed brokered CD's.

I'm betting they will say yes.

http://banking.about.com/od/cds/a/brokeredcd.htm

[hollysmom]

40. I don't know how many wys I can say this - no

these are your every day normal bank CDs, there is a minimum age to be able to do this, it is due to a federal law, it has the same interest rates as all the other CDs offered by the banks, you can't cash them in, you can not withdraw money without a penalty, all you can do is change the terms of the CD. SO, if I suddenly discover I will need money next season, I will go into the bank, and change a cd from 6 years to 3 months, then I can get the money in 3 months without a penalty. you can only do this once per year per CD.

You won't believe it if I call, why don't you ask your bank. They are not brokered CDs. I have been doing this for years. No one seems to believe me until they find they can do it themselves. Just like when my dog started talking, even my mother did not believe me until she heard the dog speak to her. - not a conversation, just a few words that made her needs easier to understand. Out, food, home.

from one banks ad
[link:https://www.statebanks.com/personal/iras/|

IRAs – Individual Retirement Accounts
At State Bank & Trust we guarantee…

No annual fees, commissions or hidden charges
No risk -- FDIC insured up to $250,000
Tax deferred earnings -- so your money grows faster (See your tax advisor)
Trade up -- after age 59 1/2, you may trade up to a higher rate once a year
Your retirement funds stay local

[A HERETIC I AM]

42. Feelin' kinda like you wanna bash your head against the wall there, are ya?

Look, we are using terms that mean the same thing. Fine, you don't have brokered CD's.

But if it walks like a duck, talks like a duck, looks like a duck, has feathers that say "Duck Feathers" on them, is tattooed with the Egyptian Hieroglyph symbol for duck, is stamped with the USDA stamp that says "100% USDA Duck", can quack the word duck in 47 languages and when plucked, and properly prepared people will say "Hey, that's some delicious Peking......".....

THEN IT'S A FUCKING DUCK!!!


But you don't have that. You have a Canard.

(French for "Duck&quot

[hollysmom]

47. no

I tried to take this off-line, but don't have enough posts to PM.

All I wanted to do was spread some information that I happened across. Not get into a disagreement.

This is a senior benefit, it is age related, it is an option to get the most out of CDs if you so chose to use them as your investment. I have other investments, but not mutual funds anymore. done with them.

I find a lot of people did not know about this option, just as I found almost every senior I know in NJ was not aware of the NJ senior freeze which freezes their property tax to the level of the previous year, one person had an accountant doing their taxes, when they asked why they were not signed up for this program, the accountant said it was not her job, she did not consider it part of doing taxes - ha! I was looking for some form and ran across it on the state web site under a misleading title.

[Generic Brad]

10. I have had a simple investment strategy

When we have a Democratic president, I invest 70% in the stock market and 30% in bonds. When we have a Republican president in office I switch it to 30% stock market and 70% bonds.

I jumped back in the day after President Obama was sworn in. I have not gotten rich with my strategy, but I have not lost nearly as much as others.

Historically, the stock market does very well when our president is a Democrat.

[marybourg]

14. I have an even simpler strategy:

live below your means, yeah, that means forgoing some things other people have; invest in a mix of stocks and bonds appropriate to your age, preferably in low cost total stock and total bond market index funds; take advantage of your employer's matching funds if any, rinse and repeat for your whole adult life. Don't time the market or pick stocks. You can't do it. That's all it takes. And I DID become rich. Dow was ~1200 when I started investing in 1982; now it's 12,000+. That's 900 % on my stock portion; bonds paid off less, but were ballast when stocks tanked.That's all it takes folks.

[JDPriestly]

53. live below your means

So many of us Americans have never learned that.

It's really sad. A lot of the hype about what a rich country we are seems to go to people's heads.

For those of us who did not earn a lot of money in our lives -- who did not always have the big or even average salaries coming in all the time -- it is so important to live below our means but also very difficult.

It's hard to tell your children that you cannot afford things they want, but if you gather the courage and very patiently explain what you can and cannot afford to your children, discuss handling money well with them, they will thank you when they grow up. Trust me on this.

"Live below your means." That means spending less on your rent or mortgage payment, buying fewer clothes, maybe second hand, giving away your kid's old clothes and accepting second-hand things from friends and relatives, not buying the latest model, and just downright doing without.

It isn't that hard or embarrassing once you get used to it. Instead of giving your children things, toys they don't really even play with, go places with them. Play sports with them. Enjoy music with them. Time is worth more than money -- especially time with mom and dad when you are a child.

[marybourg]

54. You've fleshed out all the details. Absolutely right.

And ultimately very satisfying.

[Curmudgeoness]

11. I never jumped out, but if I had

you would never ever get me back in the market. There is no way to win in the rich man's game unless you just get lucky. And I am not usually the lucky sort. So, "do you feel lucky. Well do ya, punk?"

[Odin2005]

12. Invest in US Treasury Bonds.

Stay away from the stock market.

[A HERETIC I AM]

16. LOL...

Yup. That's the ticket. Your advice is a perfect fit FOR EVERYONE.


Of course, bonds aren't the best buy right now, but what the hell.

"Buy what's cheap, sell what's expensive".

Best investing advice I ever heard.

[dmallind]

30. if you want <1% returns sure. Meanwhile blue chips often pay 3-7 on dividends alone.

[Art_from_Ark]

44. And some "blue chips" end up being duds

GM, CitiGroup and Woolworth immediately come to mind.

[sendero]

13. Familiarize yourself with the term..

.. "muppet", because you probably are one.

[benld74]

17. The day after 9/11, I took everything out of the stock and have NEVER looked back

[Logical]

41. LOL. ok

[BadgerKid]

19. It's hindsight, but you're 3 years too late.

If you originally got out before a crash, congrats to you.

[hobbit709]

20. 401 what?

What little I had was whittled down in the last 3 years to practically nothing. I haven't had a real job since 2001. Once you hit 50 and have medical problems, your chances of getting hired are zero, less than zero, and don't even think about it.

[cbdo2007]

21. Yep, buy High sell Low - that's a great market strategy.

Good luck!!!

[JoePhilly]

23. The time to jump back in was March 2009.

Since then, you'd have been doing well to buy and hold through DOW 11,000. Since then, you should have been watching for gains of 1000 followed by drops of about 500, sell some when it jumps 1000, buy back in after it drops 500 or so.

Also watch for obvious opportunities for the GOP to manufacture a crisis, that usually leads to a short term sell off followed by a rapid recovery.

[A HERETIC I AM]

26. Unfortunately.....

Many 401(k) plans do not allow one to trade like you suggest without paying an extra fee.

[JoePhilly]

28. Almost all of them allow you to rebalance your portfolio.

What I described reflects an approach which could be used by re-balancing a couple times a year.

Most plans allow you to select an asset ratio. If your 401k includes a money market fund, you basically treat that like cash. if the market runs up fast, shift the ratio so there is more in the money market account. When the market pulls back sufficiently, you shift the asset ratio.

The OP asked if they should "jump back in" which suggests that they have the ability to shift their 401k around. Otherwise there is no reason to ask the question.

[A HERETIC I AM]

31. Thanks for the lesson , but I'm way ahead of you

I was a registered rep for 4 years. I know how 401(k)'s work

[JoePhilly]

33. Humm ...

You know how they work, but you've yet to respond directly to the OP.

The OP asked a specific question. Do you think they should jump in now? Do you agree or disagree with me, that the time to jump in was back in 2009?

Do you think the OP should running screaming?

You've got the experience, please, enlighten us.

[A HERETIC I AM]

43. I haven't responded directly to the OP because I am not in the habit of giving investment advice....

to complete strangers on the internet. Not only is it unethical, it is downright stupid because I know NOTHING about the person who asked the question. Even though I am no longer licensed, I still think the regulations that prohibited me from giving such advice are a good idea. That is the reason the few registered reps we have on DU won't give answers to questions like that.

It's wrong to do so.

For all I know, the OP is the type of person who has no business being in the market at all. Perhaps they should just sit in the Money Market fund in their 401(k) and be happy with it. Or perhaps they should be 100% in stocks with a 75% weighting in BRICS, Developing Market Funds and Small Cap. How the hell should I know? Some people are investors. Some people are savers. There is a HUGE difference.

Do you think they should jump in now?

This I can say without being too specific and is basic, generic advice; If your time horizon is long enough, there is never a bad time to get into the market.

Do you agree or disagree with me, that the time to jump in was back in 2009?

I agree with you 100%, but that is completely beside the larger point, isn't it? How many people do you know sold every equity position they had in September of 2007, when the market was at or near its peak of 14,000? And how many of them bought back in, in March of 2009 when the blood was all over the floor and the Dow bottomed out in the 6600 range? Damned few, I'll bet.

Sure I agree with you, but so what? It doesn't help the OP one iota, now does it? Hindsight is 20/20 as they say.

The best play with a 401(k) is, again, depending on your time horizon - the longer the better - to simply ride things out and keep contributing. What we saw over the last 4 years was quite possibly the greatest opportunity for "Dollar Cost Averaging" in history. The cheaper Mutual Fund shares get, the more shares you get with each paychecks contribution. The people who lost their shirts over the last few years were the people who SOLD. All the people who just kept buying into their plan and havent sold anything haven't lost a thin dime. You only lose money when you sell, as I am sure you know.

Want to know what the perfect play was (as I said, hindsight and all that) between Sept. 2007 and now?

This might have been difficult to do in a 401(k) unless your plan offered a long term Treasury bond fund, but here it is;

If during the course of the month of September 2007 you had sold every equity position you had and bought recent issue, 30 year Treasury bonds with the money, you could have gotten those bonds for between 90 and 95 cents on the dollar - between $900 and $950 per bond for a bond with a face value of $1000 AND a coupon of 4.5%, meaning each bond was paying $45.00 per year in interest. If you had then held those bonds until December of 2008 when the yield on the 30 year bottomed out at less than 2.65%, then SOLD those bonds, you would have gotten around $1400 a piece for them and been paid $45 for the pleasure of owning them. A gain of over 60% while everyone that was selling during that panic was losing anywhere up to 60% Then, just to make it REALLY delicious, you waited until March or so of '09 and bought Ford stock, you could have gotten it for around $1.50 a share. Look where Ford is today. Trading in the $10.00 range and it peaked at over $18.00 a year ago January.

Nothing tricky, just exchanging equities for long bonds for 14 months.

Do you think the OP should running screaming?

Only if it makes him or her feel better.

You've got the experience, please, enlighten us.

There is one thing they DON'T give you when you pass the Series 7 Exam;
A crystal ball.

[JoePhilly]

48. Yes, but you seemed very willing to respond to others ... even laugh at a few of them.

Again, the OP was asking a very specific question. Even if you did not give them specific advice, you could have provided some of the same comments you include in your response to me above.

Why not do so?

After all, this is the internet, if some one is going to decide to invest every cent they have based on what you or I tell them, they should get out of the market NOW. The ONLY thing you and I can provide are PERSPECTIVES on how they might think about it.

And as for your Series 7 Exam ... so what? Maybe you have that, maybe not.

Don't take that wrong ... I have a BS, and MA, and a PhD, but if I have to rely on claiming that I have those degrees to make my point (on any DU forum), my points probably don't stand up on their own, particularly on a web site where we are all anonymous.

My humble suggestion, if you have the expertise, provide it, and skip the "I have credentials" part. you don't need it.

[Wounded Bear]

24. Spent mine years ago.....nt

[KurtNYC]

25. "Sell in May and Go Away" (until November)

[JoePhilly]

34. That does seem to be the pattern in recent years.

[KurtNYC]

38. That's really old school market timing

(but someone should tell Zuckerberg it is for investors, not CEOs )

All the worst market crashes happen around October -- 1929, 1987, 2000 and 2008 -- so having your money off the table helps miss those.

[JoePhilly]

39. Recently, the market has been pulling back in the early summer ...

Since 2007, generally speaking, pull back in the summer, gains in the fall and winter ... oh, and cries of DOUBLE DIP each June or July.

[slackmaster]

27. My policy is generally not to do whatever everyone else seems to be doing

HTH

[dmallind]

29. Should have never left - and added more in 3-4 years ago if you could

Pulling out when things are low and going back in when they are high is a sure way to lose money. You buy when everybody else is panicking.

[raouldukelives]

32. Since they create the storms its hard to gauge.

Unless your somehow privileged enough to gain some insight from a trusted colleague its a gamble. Still, all the old favorites will always be there waiting. Monsanto, Dow, GE, Apple, Halliburton, Pfizer, BP. They can only become as powerful as they desire with the full participation of every individual pledging support and monetary aid to them in return for some profits.

[mainer]

35. Hold off until next year.

My advisors are telling me there is going to be a bloody end of 2012 thanks to legislative inaction on several pressing issues.

[taught_me_patience]

36. Do the opposite of what your instincts tell you

they are almost always wrong. The time to get interested is when stocks are going down and the time to sell is when they are going up.

[yellowcanine]

37. Trying to time the market is difficult. See an investment adviser about what your portfolio should

contain given your age, years left to work, retirement plans, etc. If you are relatively young (15 or more years to retirement) a significant portion (50-60%) of your retirement should be in stocks.

[Art_from_Ark]

45. Stocks are a sucker's bet

I wouldn't even put 10% of my available funds into stocks.

[sabrina 1]

46. Only if you don't mind gambling with your money. Maybe try Atlantic City, you'll probably

spend less.

[Xyzse]

49. NO!

You do not want to mess with your 401s.
G'ah, I am scared when that mess will come up and it will come up within the next 15-20+years.

401s as is are heavily hit by fees and other charges that can take up to 30% of the actual value or more.
Then they want to set this up so that people can use money to be invested in by Private corporate banks? It is a recipe for disaster and speculation.

As is, most of the money are already up top and as such not circulating in the greater economy. That money needs to go somewhere and is used for trading, and more likely than not, speculation. This then creates bubbles, which improves growth of the economy in regards to money made, but it doesn't mean a richer society, just an ever increasing siphoning upwards.

401s I guess are a means to an end. It is still one of the viable investment strategies even if I don't particularly trust it.

[dmallind]

50. Every now and again I return to bookmarked market threads.

The results are often fun.

Someone entering a broad market equity position on this thread's date would be up 12% now.

What would bonds have done? CDs?

[JDPriestly]

51. Any small fish who tries to swim in a sea of full of super-fast computer sharks is likely

to be swallowed alive.

The market is only for people with the money and the means to trade fast, fast, fast.

Anyone who thinks they can jump in with only their 401(K) money to keep them afloat is insane or ignorant.

Each trade should be taxed. That would help slow down the fast-trading sharks who feast on naive investors.