Share good ideas and conversation.   Login, Join Us, or Take a Tour!
comment by ButterflyEffect
ButterflyEffect  ·  11 days ago  ·  link  ·    ·  parent  ·  post: If you had $5000....

No way. So, let's say the Q1 2018 and Q3 2018 prediction is right, somewhere in that time period/before that time period would be a "good" (loosely used) time to switch to cash, at least to mitigate risk of the market pullback?




kleinbl00  ·  11 days ago  ·  link  ·  

the best time is now. You don't need to yank all of it, but you could sure as shit yank some of it. More than that, you could call up the company that sends you your 401k statement every month and say "I want to pull back while the pulling is good, what do you recommend I put this money in to shelter it against what I think is likely to be a downturn in the next 18 months?"

Remember: you can't buy low if you don't sell high. You don't have to sell all of it. You don't have to sell half of it. Let's pretend you have $100. Let's say you liquidate $25. The market goes up another 10% - you have $102.50 instead of $110. You're still making money.

Let's instead assume the market goes down 25%. You have $81.25 instead of $75. And now you dump your $25 cash into stocks that are down 25%. When it goes back to where it was, you have $112.50 instead of $100. And that's if you only liquidate 25% of your portfolio.

The gestalt of the market right now is that there's a lot more downside risk than upside return. The entities invested in the markets are largely those that have to be - ETFs, pension funds, etc. If you don't mind making 3% rather than 10%, go partially to cash.

Isherwood  ·  10 days ago  ·  link  ·  

Can we have more $100 investing lessons? That makes a lot more sense.

kleinbl00  ·  10 days ago  ·  link  ·  

I mean, it's just math. It's barely algebra. I think you'll find that if you call the number on your statements and say "I have questions" they'll leap at the chance to give you opinions. At least then you're getting advice that directly relates to you, rather than the current whim of some blowhard on the internet.