Anonymous wrote:My only money in the market is my 401(k). I’m a few years from retirement and wondering if I should shift some of the stock funds (however, most of my funds are balanced funds) into money market funds as we approach the debt ceiling. I can’t just go to a regular savings account without having to cash them in at a higher tax rate while still working.

I would. If you are young or middle aged, your investment horizon is 10+ years and stocks will beat cash over that time window almost everytime. You are a few years out of from needing the money and we have entered a time period where can might out perform stocks for the next few years. Timing the market is hard because you need to know when to get out and when to get back in. In your case you only need to know when to get out and that you have to get out, at least for a portion of your investment, in the next few years.

Anonymous wrote:

Anonymous wrote:I’m surprised at those saying now is the time to “buy low.” My portfolio is well off the lows of last year and substantially up this year. Even if the debt ceiling is resolved (I think it will be) every economist I’ve read thinks stocks are due for a downturn this summer/fall. We’re not liquidating stocks, but as income comes in, we’re hoarding cash/buying bonds. After years of being heavily in equities, we’re slowly going back to a more “normal” allocation.

The S&P500 is roughly even to what it was 2 years ago (-<1%) and international indices are still at a 2 year negative. Given that the average stock market year is 10%, that's a low. That said, if you're more heavy in stocks than your desired allocation you should shift that with new money.

That’s ignoring the fact that in 2021, the government and Fed were still artificially juicing the economy, and we still haven’t seen the full impact of the Fed’s attempts to unwind that. If you draw a line from 2010 to now, you get a straight line to the current value. And people who think the Fed will reverse course and start easing the minute the stock market drops are delusional.

My only money in the market is my 401(k). I’m a few years from retirement and wondering if I should shift some of the stock funds (however, most of my funds are balanced funds) into money market funds as we approach the debt ceiling. I can’t just go to a regular savings account without having to cash them in at a higher tax rate while still working.

Anonymous wrote:

Anonymous wrote:I’m surprised at those saying now is the time to “buy low.” My portfolio is well off the lows of last year and substantially up this year. Even if the debt ceiling is resolved (I think it will be) every economist I’ve read thinks stocks are due for a downturn this summer/fall. We’re not liquidating stocks, but as income comes in, we’re hoarding cash/buying bonds. After years of being heavily in equities, we’re slowly going back to a more “normal” allocation.

Historically, they tend to be wrong, and those are the best times to invest.

If they knew more than others, they’d be rich. They’re not.

And you know this, how? The economists & advisors I follow have made me pretty damn rich and they are doing very well themselves.

Over 40 years of investing, I have learned that it does make sense to try to feel which way the wind is blowing, and you can position yourself to weather the inevitable downturns better than simply charging on through no matter what. Stocks are a good investment over the long term, but the “invest in stocks and never touch them again, no matter what happens” advice is for people who might be prone to panic and be tempted to dump their stocks at the bottom. Note that Warren Buffett doesn’t follow his own oft-cited advice.

Anonymous wrote:I’m surprised at those saying now is the time to “buy low.” My portfolio is well off the lows of last year and substantially up this year. Even if the debt ceiling is resolved (I think it will be) every economist I’ve read thinks stocks are due for a downturn this summer/fall. We’re not liquidating stocks, but as income comes in, we’re hoarding cash/buying bonds. After years of being heavily in equities, we’re slowly going back to a more “normal” allocation.

The S&P500 is roughly even to what it was 2 years ago (-<1%) and international indices are still at a 2 year negative. Given that the average stock market year is 10%, that's a low. That said, if you're more heavy in stocks than your desired allocation you should shift that with new money.

Anonymous wrote:I’m surprised at those saying now is the time to “buy low.” My portfolio is well off the lows of last year and substantially up this year. Even if the debt ceiling is resolved (I think it will be) every economist I’ve read thinks stocks are due for a downturn this summer/fall. We’re not liquidating stocks, but as income comes in, we’re hoarding cash/buying bonds. After years of being heavily in equities, we’re slowly going back to a more “normal” allocation.

Historically, they tend to be wrong, and those are the best times to invest.

If they knew more than others, they’d be rich. They’re not.

Anonymous wrote:Tempted to do this in case the country hits its debt ceiling and things aren't resolved.

How short of a memory do you have? This happens at least every two years. Hell, Senator Biden voted against raising the debt ceiling three times between 2003 and 2006.

Senator Obama voted against it once, and he didn’t even serve a full term.

I’m surprised at those saying now is the time to “buy low.” My portfolio is well off the lows of last year and substantially up this year. Even if the debt ceiling is resolved (I think it will be) every economist I’ve read thinks stocks are due for a downturn this summer/fall. We’re not liquidating stocks, but as income comes in, we’re hoarding cash/buying bonds. After years of being heavily in equities, we’re slowly going back to a more “normal” allocation.

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:I’m surprised more people aren’t concerned with the debt ceiling. We are mid forties and hoping to retire in 10 years with approx. $2 million in the market. As a precaution we are moving 10% every week out of the market in May as we approach the June ceiling. We are careful not to cause any taxable events, liquidating no-load index funds first.

You're pulling your 40% of money out when the S&P500 is at a negative 2 year return? And total index and international is worse? That seems risky to me unless you were not allocated appropriately before.

You do realize some people have been investing more than two years? With higher interest rates, this also isn’t the worst time to sell while the market has recovered, wait out the brinksmanship in DC and buy low.

I've been investing for decades, so yes, I know. But I also know that you should do your allocation based on your time horizon and needs, not events like the debt ceiling. It's hard to time when to get back in if you want in--most of the gains will likely be made on one or two unexpected days. This is a way to lock in losses. But if you realize that you were over-invested in the stock market for your time horizon, sure, pull money out--but I would think it's a fool's job to try to jump back in to buy low.

Anonymous wrote:

Anonymous wrote:I’m surprised more people aren’t concerned with the debt ceiling. We are mid forties and hoping to retire in 10 years with approx. $2 million in the market. As a precaution we are moving 10% every week out of the market in May as we approach the June ceiling. We are careful not to cause any taxable events, liquidating no-load index funds first.

You're pulling your 40% of money out when the S&P500 is at a negative 2 year return? And total index and international is worse? That seems risky to me unless you were not allocated appropriately before.

You do realize some people have been investing more than two years? With higher interest rates, this also isn’t the worst time to sell while the market has recovered, wait out the brinksmanship in DC and buy low.

Anonymous wrote:I’m surprised more people aren’t concerned with the debt ceiling. We are mid forties and hoping to retire in 10 years with approx. $2 million in the market. As a precaution we are moving 10% every week out of the market in May as we approach the June ceiling. We are careful not to cause any taxable events, liquidating no-load index funds first.

You're pulling your 40% of money out when the S&P500 is at a negative 2 year return? And total index and international is worse? That seems risky to me unless you were not allocated appropriately before.

I took a little out this week when I saw the market was a little up, but only bc we are buying a car in the next couple of months and need the cash.

I’m surprised more people aren’t concerned with the debt ceiling. We are mid forties and hoping to retire in 10 years with approx. $2 million in the market. As a precaution we are moving 10% every week out of the market in May as we approach the June ceiling. We are careful not to cause any taxable events, liquidating no-load index funds first.

Congressional Republicans are crazy and undisciplined. Even Larry Summers thinks that the stock market will continue to be volatile for the next few years.

No, but I already have a lot of money in high-yield savings accounts as part of my asset allocation, and I'll continue to add to that as new money comes in.