Reply to WHO is pulling all of their money out of the stock market?

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]Not messing with my 401k but pulled all my other investments our when Dow was at 26,000. This is going to get much worse before it gets better. Will probably put money back in in April or May when Dow will probably be down to 14,000 to 15,000. The markets aren’t going to go up when we have 10,000+ deaths from this, if not hundreds of thousands. I’m not riding the elevator all the way down to 0.[/quote]

NYT story says new modeling shows hundreds of thousands of death is a best case scenario if everyone stays home for 3-4 months. Downside is 2.2 million deaths in US.  This isn’t over by April or May by a long shot.

That said a chunk of my money is in the stock market because I intend to use it over the next 10-30 years so I am leaving that chunk there.

I think a good test is whether you are willing to lose half the money you have in the stock market in the short term. If not, consider a less risky investment[/quote]

Why wouldn’t you pull out now and just reinvest later then? It makes no sense to just let your money depreciate when you could just buy way stocks for your money down the road. “Timing the market” is a phrase used for pretending you can predict the market’s reaction to unknown events in the future. We know there will be tens or hundreds of thousands deaths. Why would the markets go up when NYC turns into Wuhan?[/quote]

Because I don’t know in advance when the gains will come. A huge percentage of stock market gains in a bull market come in single day bursts and if I miss even 2 or 3 of those I’d be worse off than if I rode it all the way down and all the way up again. Plus I don’t have to decide whether it’s a temporary revival/dead cat bounce or the true beginning of a bull market, I just wait.

All through the Great Recession my TSP was losing money even though I kept contributing but I just started throwing the statements in the trash without opening them and I am almost certainly better off than if I had tried to get out and back in.

I can’t promise the same will happen here but I am willing to bet that if I commit to the market long term I personally will do better financially (and mentally) than if I try to time it. [/quote]

That's what all the research says.  You do better just leaving it all alone than trying to time it.  A few people here and there might get lucky (or equally unlucky) but generally even the pros don't do any better try to time it.[/quote]

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