It looks like my 401K has gone up about $400 the past couple of days. I think it was up $100 Monday, and up $300 as of the closing yesterday.
I’ve just had a conversation with the investment manager who manages the 401Ks for my employer. He says we could be in for ‘exciting times’ – good-exciting, or bad-exciting, depending on how the market goes. He said that if I wanted to be really safe and FDIC-insured, I could move my investment to an IRA at a bank. Otherwise I could choose the Money Market Fund, which is about 60% cash and 30% bonds, and is currently earning 4.4%.
He suggested that if I did want to jump into a foxhole (my metaphor, not his) I might consider moving everything into the Money Market Fund, but leaving future investments as they are (some sort of T Rowe Price fund that’s been very good to me over the years). That way if I lose money while this whole Charlie-Foxtrot of an administration is 'running the country like a business (and we’ve seen how Trump runs businesses: Into the ground) I’m not losing much. And if the market crashes and I’m still buying into the Fund, then I’ll make more money when it recovers. Of course I can re-invest from the ‘safe’ Money Market Fund once the market bottoms out. Yes, ‘timing the market’ is hard; but I called it last time (although I couldn’t ‘save’ my portfolio so that I could ‘buy low’). The market did continue to decline briefly, but not by much.
So I am going to be keeping an eagle eye on my 401K, the stock market, the news, and our corrupt government.
We have a (now sleeping) thread I started about moving to safety due to Trump’s policies.
My “happy place” is 80% broad, low cost index funds, with the S&P 500 being the lion’s share. It has served me really, really well. I have always boasted that I was that guy with diamond hands who ignored one crisis after another, and my personal CAGR back to 1996 is 11%.
Over the last two weeks I’ve made changes and I’m now 20% bonds and 15% money market.
I think what Trump has done has already triggered a recession, just due to the money taken out of the economy (workers, farm money, grants that funded organizations, etc) we just won’t actually see it for 3-6 months.
I sold about half of my S&P 500 holdings about a month ago but thought there might be a little bit more juice to squeeze, on the back of Tesla cranks and the like but…nope, totally pulled out this morning and moved everything over to Europe.
If Trump enacts his tariffs, it’s going to hit the US economy hard. But since other countries – notably Canada – will be forced to enact retaliatory tariffs, Trump will blame those other countries for the recession, since Trump himself can do no wrong. What happens after that is anybody’s guess, but like everything to do with Trump, it will be very bad.
Well, I’ve just changed my 401(k) to 99% cash and bonds and 1% T. Rowe Price. I feel as if I’m a day late and a dollar short (I think I should have pulled the trigger on Friday). Praying I’ve made the right choice. My contributions are still going to T. Rowe Price going forward. I only have (as of Friday) $196.7K, and that’s my retirement/life insurance.
I think the stock market is going to shit the bed and it’s already starting that process, but if the tariffs become reality, along with the massive unemployment that is on the horizon, things aren’t looking good. Having cash when things hit rock bottom can be a good thing. I have a lot of cash in relatively high interest things, but if I think we hit bottom (or close to it), I’m ready to throw that into the stock market. I expect that point will be several years from now. I just bought more I-bonds in the interim.
I sold off all my American stocks 2 weeks ago at their high point. I sold NVDA at $140 and now it’s $108. Pretty much all the sales were the perfect timing.
I’m trying to learn how to best take advantage of the collapsing market. Yesterday for the first time I bought inverse ETFs and while the market had a shit day, I had my highest one day gain ever (although most of that came from the European defense sector being up 10%). I’m learning how to do puts now.
I’d rather my country not collapse but if it does I may as well try to lose the minimum from it. (I’d say gain, but with the US economy destroyed we’ll all end up poorer anyway).
Your example isn’t a particularly good one for that argument.
If you note that Hitler is a bit crazy and that his followers seem a bit crazy, and you’d prefer to avoid lumping your money with crazy people, then you might look at the available stock markets and try to choose the one that’s least likely to be impacted. Taking a gander at the stock markets that were around at that time, I judge that you’d likely land on parking your money with the USA, sometime in mid-1939 (say around $140 a share). At the end of the war, December 1945, you’d have gone up to about $192 (37% growth).
Of course, to buy the US stocks, you would need to convert to dollars. If you had 1000 Deutsch Marks in 1939, that would buy you about $2490 USD. That grows to $3414 by the end of 1945. Transferring that back to Germany, in 1948, you’ll have 1025 Marks.
If you had kept that money in the German market you’d have bought at about 7 Marks and sold at about 2.5 Marks, so your 1000 Marks would have turned into 357 Marks.
Don’t time the market is a piece of wisdom with merit. Buy low/sell high is a piece of wisdom with merit. Figure out how to avoid the ramifications of Tulip Mania is also its own piece of wisdom and worth taking note of.
As I’ve mentioned in another thread, I have lived for 30 years by the “don’t attempt to time the market” mantra.
The difference is that we’ve never had someone broadcasting their intent to do things that pretty much everyone agrees are bad for the market.
If you KNEW in 2007 what was coming with the Great Recession, would you have moved money to the sidelines? Because I think that’s the difference here. He’s doing what he said, and we see markets down about 5% in just a few day as a result.
That said, I have a friend who thinks (CT-ish, I know) that Trump is intentionally causing swings so his affiliates can profit. He thinks Trump is telling them what he’s going to announce and when so that they can buy/sell accordingly.
Yes, I have been hearing for the past few months that the market is overvalued, and that the CE ratio indicates this. I have investments that fund my lifestyle, so I am paying attention. I will say that we have moved some of our money into bonds lately, so perhaps people such as myself are part of the problem as to the market’s drop at the present time. I don’t want to be too hopeful that this is due to Trump, therefore. We need many months before we can say Trump’s policies are at fault. (And I hate Trump as much as is possible), but I would prefer people not suffer financial hardship. I think that could backfire, bc these Trump supporters are concrete in their belief that he is great. They will just blame democrats. I know many of them, and they are butthead stubborn (most are male, most are lower income, and most are very isolated).
Well, I decided to start taking dividends instead of DRIPping them, since I’m stuck paying taxes on them anyway. Instead I’ll mega backdoor Roth the equivalent at work. I figure that in four years or so, and certainly by time I retire, we’re going to have to pay for all the shit that’s going on, and reducing my taxable exposure will be good.
I’ve made the right choice. My contributions are still going to T. Rowe Price going forward. I only have (as of Friday) $196.7K, and that’s my retirement/life insurance.