Washington Mutual Collapses

[fondybrewfan]

Since the beginning of the year was able to avoid panicking and I had 100% of my 401K portfolio in various mutual funds. I pretty much followed the advice of our 401K administrator since I know the guy. But when I looked in July and I saw I was getting a negative 18% return on the year I kind of freaked out and transferred some funds. Since that time I am beating the market so I think I made a wise choice. Now my next difficult choice is when I should move that money back into the market. I am thinking of doing it shortly. I just can't imagine what bad news could make the stock market drop even further. What other institutions are out there that are still at risk of failing?

[homer]

Fondy, you could have kept that money under your pillow and beat the market. over the short term stocks go up and they go down. Look up dollar cost averaging on the web - if you're in it for the long run it's best to just do an annual review of your holdings. it's way too difficult to time the market - unless you're Warren Buffett.

[dadofandrew]

If you can time the market, you're one of the very few. Considering how few pros can do it, I don't even try.

[FVBrewerFan]

It's in the best interest of the financial services community to talk about dollar cost averaging, and stick with ir for the long haul, etc. They want you to aprk your money in stocks and mutual funds and leave it there indefinitely. Makes perfect sense these "experts" would want us to do that.

 

It is possible to time the market to some degree. I don't mean we can get in and out at EXACTLY the right time, but we can miniize losses and maximize gains. For example, I reduced my positions in the market at the beginning of the year. I bailed out big time after the Lehman/AIG news. Glad I did. This morning I bought into the market again, but I'm still not invested to the defgrre I was a year ago at this time.

 

Now, I could miss out on a huge market surge if I wait too long. But I will still come out ahead by avoiding the big dips so far this year. By the way, not to hijack the thread but the best possible way to kickstart the economy, markets, and financial institutions would be a significant cut i nthe cap gains rate.

[dadofandrew]

I just heard the same thing about the cap gains tax on CNBC. I am a believer in the consumption tax, that all income, savings, and investment returns should be tax free. Pay as you go.

[fondybrewfan]

So the general consensus is that it was wrong of me to take 15% out of the market? Atleast 15% of my portfolio is stablized at this point and not losing money. I have a co-worker who put 100% of her portfolio in a money market account in January and she says shell put it back in the market in the next couple weeks. Obviously here portfolio is light years ahead of mind. How is that a bad thing? She is going to be buying in at a very low price on a lot of the mutual funds and she hardly lost anything.

[homer]

If she can time the market, good for her. Not many people can. She may buy in and the market could drop again. The goal of a 401K is not how big your portfolio is right now, it's how big it is at the point you retire. Just because hers is larger now doesn't mean squat 30 years from now.

 

Also, we're talking 401Ks right?

[fondybrewfan]

If she can time the market, good for her. Not many people can. She may buy in and the market could drop again. The goal of a 401K is not how big your portfolio is right now, it's how big it is at the point you retire. Just because hers is larger now doesn't mean squat 30 years from now.

 

Also, we're talking 401Ks right?

Yes. The only investment I have right now is the 401K through my employer. I put in 6% and my employer matches 100% up to 6%. I am pretty sure that is a very good deal.

[homer]

It is a good deal but you should be putting 15% in there even though they only match up to 6.

[fondybrewfan]

It is a good deal but you should be putting 15% in there even though they only match up to 6.

I would if I could but I am pretty sure I can't afford that. Maybe if my medical insurance wasn't so expensive.......

[FVBrewerFan]

I can't agree with that more. When I was much younger I was fortunate enough to have a boss that hit me over the head with that every day until I did it. Tax free is king, plus it goes right into your account and it's forgotten. After a few months you will learn to live without it. I have socked away the max allowed by law every year, and it's the best financial move I ever made.

[dadofandrew]

Raise your % you invest 1-2% a year until you hit 15%.

 

If you get promoted and get a big raise, raise it all at once, you will probably never notice.

[homer]

Raise your % you invest 1-2% a year until you hit 15%.

 

If you get promoted and get a big raise, raise it all at once, you will probably never notice.

That's exactly what I did when I started work.

[fondybrewfan]

Anohter 7% and 730 points today. Under 10,000 for the first time since 2004.

 

Holy cripes is Wall Street freaking out. The only good thing about this mess is that it is causing a huge drop in oil prices.

[dadofandrew]

When I saw the drop (500 now), my first thought was of the "market timers" who were getting in last week, because 10600 was some sort of floor.

 

I also found it ironic Jim Cramer says if you need the money in the next 5 years, you should just get out of the market now. I'd say that's the case regardless of how the market's doing.

[fondybrewfan]

When I saw the drop (500 now), my first thought was of the "market timers" who were getting in last week, because 10600 was some sort of floor.

 

I also found it ironic Jim Cramer says if you need the money in the next 5 years, you should just get out of the market now. I'd say that's the case regardless of how the market's doing.

I think it is a little late for that, unless Cramer thinks the market is going to drop another 20%. IMO if you haven't gotten out already you might as well just ride it out. Even though these numbers make me want to get out.

[FVBrewerFan]

When I saw the drop (500 now), my first thought was of the "market timers" who were getting in last week, because 10600 was some sort of floor.

Not this market timer. My money isn't going back in any time soon.

[dadofandrew]

Wow, I must admit, Wal Mart and many other stocks look like bargains galore right now. I suppose such bargain hunting is why the market jumped up in the last 20 minutes of trading.

[PeaveyFury]

Boy, this sure seems to have become a full-blown panic.

[fondybrewfan]

Boy, this sure seems to have become a full-blown panic.

Even the 1/2 point cut today didn't give wall street a quick boost like a rate cut usually does. The Dow has been all over the place today.

[dadofandrew]

According to market people on CNBC, the people selling are fraidy cats, and the "pros" are buying on the dips.

 

Unless your time frame is within a year or two (and no you should not in the market anyway), 9500 seems like a great time to get in. In 10-20 years, you got a huge discount from 6-12 months ago.

 

I'd buy 20% now, and keep investing when it has a bad day. There's no such thing as a floor, but given some companies are selling at 3 times earnings, it's time to bargain hunt. I don't see XOM or WMT hurting an iota more than they were a week ago(it's easy to argue WMT is helped), and both are off $5 with the market.

 

I'm no market timer, but if you are, time to start dipping your toes in.

[fondybrewfan]

Yeah but there are still people saying it will go much lower. Based on Cramer's 20% comment he expects the market to get into the low 8,000s. If that is the case their probably is still atleast 2-3 more rough months ahead. Most prognosticators are saying don't expect a ton of improvement until 2010.

[dadofandrew]

That's why I'm not a market timer...but if I was, I'd dump in another 20% at 8500...which looks a lot cheaper than 9500 to me.

 

Simply put, those people that got out today will look very silly in a relatively short of amount of time...probably less than a year, which is a blink of the eye for the market.

[pitchleague]

got another set of Quarterly statements today. Very depressing to read, I'll say that. But I'll stick with it and hope to buy up stuff on the cheap and reap some benefits (if and) when the market bounces back.

[dadofandrew]

Pl, remember what Buffet would say...unless you plan on retiring tomorrow, that amount is meaningless.

 

In fact, if you're under 45, I'd say it's all but a waste to even look at them. Just keep investing and at the end of your working days, you'll have no regrets.