Finance and Economics > Economic News, the Global Economy and all Things Monetary

Is it Time to Pull Out of the Market?

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Smurf Hunter:
To the OP question - the "market" is not exactly the same thing as the "economy".   

There could always be some freak good or bad news that causes a spastic reaction in the stock market.  I think what we need to figure out is:

1) what will make the next crash long term?
2) what criteria does the majority of the investing public  (sheeple?) use to decide this?

personally I have my traditional  IRA (accumulation of  401k roll-overs) 75% in cash.  At this point I'm only getting 1-2% annually between the feeble money market rate and a few equities paying dividends.  If I were to cash out of that account, I'd lose more in taxes than I'd lose if 100% of my equities went to 0.

The only scenario where it could possibly make sense to exit from a pre-tax retirement account, if there was a critical cash needed emergency.  From a wealth perspective, if a handful of my blue chip dividend paying stocks actually went to zero, that probably means the US dollar is toilet paper and the zombie horde is fast approaching.

endurance:

--- Quote from: bigbear on July 30, 2012, 12:07:14 PM ---
If Romney wins: Can opening drilling and domestic energy production create enough jobs to counteract decreased tax revenues (from extended across the board tax cuts)?  Some drilling comes at a cost (fracking knowns/unknowns - health, environmental...), but could provide a few economic boosts (jobs, increase tax base, decreased unemployment payouts, lower energy cost across the board, energy 'independence'?). 


--- End quote ---


I really doubt the change in presidency will make a major change in the number of active drill rigs in the US, unless you want to credit Obama with the largest increase in new oil rigs coming on line ever...  And that decrease in gas rigs has a lot more to do with the surplus of natural gas right now pushing prices down than what administration is in office.

I suspect ANYTIME between now and 2015 we'll start to see the beginning of an oil and credit crunch that is going to send the global economy into a tail spin.  Trying to figure out when is a fool's errand.  I believe in staying diversified so you don't get pummeled by inflation or deflation.  Silver, gold, dividend yielding stocks, short term bonds, cash, productive land--It all belongs in a portfolio, but some things need to be trimmed back to 10% from time to time and some should be allowed to grow to 30-35% from time to time.

KellyAnn:
I disagree because I thought the time to "get out" was about 3 months ago.
At that time, I moved the money in my company-sponsored 401k to the safest investment possible in the 401k.
In the case of my companies 401k, the safest option was a savings account.
I haven't stopped contributing, because my employer matches at 80% of the first 5% contributed.  An 80% return on my investment is just too good to pass up.
I also direct what my husband does with his 401k account.  Unfortunately, he doesn't have a savings account like option.  We chose instead to put it in the very safest option available to him.

I wouldn't withdraw the amount in either of our 401k accounts, I'm only in my mid 30's and wouldn't want to pay the penalties & fees.  If I were to leave my current employer, I would rollover the 401k into an IRA that gave me the kind of investment options I wanted.

Smurf Hunter:

--- Quote from: KellyAnn on July 30, 2012, 06:12:03 PM ---I disagree because I thought the time to "get out" was about 3 months ago.
At that time, I moved the money in my company-sponsored 401k to the safest investment possible in the 401k.
In the case of my companies 401k, the safest option was a savings account.
I haven't stopped contributing, because my employer matches at 80% of the first 5% contributed.  An 80% return on my investment is just too good to pass up.
I also direct what my husband does with his 401k account.  Unfortunately, he doesn't have a savings account like option.  We chose instead to put it in the very safest option available to him.

I wouldn't withdraw the amount in either of our 401k accounts, I'm only in my mid 30's and wouldn't want to pay the penalties & fees.  If I were to leave my current employer, I would rollover the 401k into an IRA that gave me the kind of investment options I wanted.

--- End quote ---

I'm in a very similar boat.  I contribute enough to get my employer's maximum match, and it's all going into some hyper conservative wealth preservation fund.  Your match % is incredible.  I was excited to get 50% of the first 6%. 

Funny, I recently got a phone call from a Fidelity rep who manages my 401K account.  He was worried I wasn't getting enough ROI.  I explained that I'm getting 50% ROI via employer match.  He didn't really see it that way.  If you compared the post tax take home pay with the contribution+match - it's close to double ($100 pre-tax + 50% match vs. 25-30% inc tax on $100).

dk1138:

--- Quote from: Alan Georges on July 30, 2012, 06:36:27 AM ---And let me state for the record that I am now, have always been, and will remain a fan of Romana: http://en.wikipedia.org/wiki/Romana

--- End quote ---

Time travel FTW!  I used to be a huge fan of the show and had a crush on this character.  Thanks for reminding me how old and geeky I am.  ;)

Seriously, I do think both "sides" benefit from stasis and criticism until after the election.  I'm very unconfident of being able to predict "when" something will happen, but I am looking for ways to ease out of the casinos markets. 

I certainly am not feeling too much "leisure" about it, just looking for good exit points. 

Case in point: We took some IRA money (above the allowance) to help buy a house on 1.5ac that we want to keep for the long-term.  I'll probably pay penalty to use more IRA money to pay the tax bill on that this year. I figure this is less exposure to (1) the markets and (2) future tax rate increases.  As Jack points out, this is very regulated money. 

I am looking forward a great deal to his further thoughts on this matter. 

Best,
David

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