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I don't know if it was a good bet but I moved all my 401k into money market accounts for the time being last Thursday. I feel like those who say I should ride

I don't know if it was a good bet but I moved all my 401k into money market accounts for the time being last Thursday. I feel like those who say I should ride the wave down are probably not telling me the truth. All indicators seem to suggest a 25% correction or more before the end of the year. I've been buying stocks heavily on the latest dips and so far that is all down around 20%. I diversified investments in cruises, airlines, real estate, banks, tech and more. It feels like 2008 is happening all over again.

derekp7 7y ago
I think you misinterpret what they are saying. What really happens is that even though it was a good move this time, the next time you have the same feeling and make the same move, what you move it into may go down and what you move it out of goes up. Then when you buy back into stocks you are buying at a higher price than when you pulled out. And this second scenario happens more often to people than the first one (according to common wisdom).
segmondy 7y ago
Good move, Dec I moved 33% to Bond, 2 weeks ago I moved another 33% to Bond. I'm kicking myself for not moving the rest, but I can stand to be in the market for a very long time. Most knowledge that say rid the wave is rubbish. Get out if you know that things will be down so you can live to fight another day. If you have $100 and market goes down 50%, you have to wait for it to come back 100% to break even. Most folks don't understand that movement isn't equal in either direction. Market goes down 10%, comes back up 10% most folks think it has balanced, but it hasn't.
- dbancajas 7y ago
  aren't you timing the market though? if it's down 10% today, you moved to bonds, then it's up 20% due to recovery and you missed the upswing, then you are in a worse spot compared to if you haven't done anything? "but I can stand to be in the market for a very long time" -> isn't this the reason to not do anything? So you can recover and buy more while everything is on discount?
jedberg 7y ago
You're not being told to ride the wave down per se, you're being told that you can't time the market so there is no point in trying. You got lucky this time, but next time you might pull out just as it's about to swing up again. Or when you eventually buy back in, it might not be the bottom. Or more likely, it will be after the bottom on the upswing and then you've lost out even more.
oiasdjfoiasd 7y ago
I always have a good laugh at these posts - happens every time after a correction.
sjm 7y ago
Why would you diversify in cruises and airlines in this environment? Unless you're shorting them.

derekp7 7y ago

I think you misinterpret what they are saying. What really happens is that even though it was a good move this time, the next time you have the same feeling and make the same move, what you move it into may go down and what you move it out of goes up. Then when you buy back into stocks you are buying at a higher price than when you pulled out. And this second scenario happens more often to people than the first one (according to common wisdom).

segmondy 7y ago

Good move, Dec I moved 33% to Bond, 2 weeks ago I moved another 33% to Bond. I'm kicking myself for not moving the rest, but I can stand to be in the market for a very long time. Most knowledge that say rid the wave is rubbish. Get out if you know that things will be down so you can live to fight another day. If you have $100 and market goes down 50%, you have to wait for it to come back 100% to break even. Most folks don't understand that movement isn't equal in either direction. Market goes down 10%, comes back up 10% most folks think it has balanced, but it hasn't.

dbancajas 7y ago
aren't you timing the market though? if it's down 10% today, you moved to bonds, then it's up 20% due to recovery and you missed the upswing, then you are in a worse spot compared to if you haven't done anything? "but I can stand to be in the market for a very long time" -> isn't this the reason to not do anything? So you can recover and buy more while everything is on discount?

jedberg 7y ago

You're not being told to ride the wave down per se, you're being told that you can't time the market so there is no point in trying. You got lucky this time, but next time you might pull out just as it's about to swing up again. Or when you eventually buy back in, it might not be the bottom. Or more likely, it will be after the bottom on the upswing and then you've lost out even more.

oiasdjfoiasd 7y ago

I always have a good laugh at these posts - happens every time after a correction.

sjm 7y ago

Why would you diversify in cruises and airlines in this environment? Unless you're shorting them.