When market drops....shifting funds?

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When market drops....shifting funds?

Postby alewisdvm » Thu Jan 31, 2013 6:53 pm

So, of course, it is never smart to chase the market.
But, hypothetically.
If you have a few vanguard index funds, and the market is suspected to head again in to a recession, in theory, where would you move the assets of the index fund ira's and 401k's?
Could you just move into bonds temporarily?

I know there are definitely some investors who want to predict market movement, and plenty of theories (some completely worthless predictions coming out of yahoo) that market and U.S. economy is headed for possible recession...

I figure there are PLENTY of comments to tear apart those who chase the market, but was curious what investors do that prefer a sell and buy approach as market moves in large swings.

Thanks
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Re: When market drops....shifting funds?

Postby zebrafish » Thu Jan 31, 2013 7:02 pm

This is not the right message board for you if you are looking for market timing rationalization...

But if stocks drop, bonds will de facto increase in your portfolio asset allocation. When rebalancing occurs or you make additional purchases to maintain AA you buy low and potentially sell high. This is the beauty of staying the course as they say.
Last edited by zebrafish on Thu Jan 31, 2013 7:15 pm, edited 2 times in total.
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Re: When market drops....shifting funds?

Postby alewisdvm » Thu Jan 31, 2013 7:11 pm

I understand.
That is why I have always been long and use almost all vanguard funds.
Just a general inquiry because I was curious.
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Re: When market drops....shifting funds?

Postby leonard » Thu Jan 31, 2013 7:27 pm

Hypothetically and in theory - you should stay the course.
Leonard | | Market Timing: Do you seriously think you can predict the future? What else do the voices tell you? | | If employees weren't taking jobs with bad 401k's, bad 401k's wouldn't exist.
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Re: When market drops....shifting funds?

Postby pkcrafter » Thu Jan 31, 2013 7:56 pm

alewisdvm wrote:So, of course, it is never smart to chase the market.

Bogleheads would stop right here. :happy

But, hypothetically.
If you have a few vanguard index funds, and the market is suspected to head again in to a recession, in theory, where would you move the assets of the index fund ira's and 401k's?
Could you just move into bonds temporarily?

You could.

I know there are definitely some investors who want to predict market movement, and plenty of theories (some completely worthless predictions coming out of yahoo) that market and U.S. economy is headed for possible recession...

I figure there are PLENTY of comments to tear apart those who chase the market, but was curious what investors do that prefer a sell and buy approach as market moves in large swings.

I've mentioned where Bogleheads would stop, but someone will come along and suggest how/when to sell and buy, but If you really want to get a discussion going on timing, you'll have to join a timing forum.

Paul

When times are good, investors tend to forget about risk and focus on opportunity. When times are bad, investors tend to forget about opportunity and focus on risk.
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Re: When market drops....shifting funds?

Postby nisiprius » Thu Jan 31, 2013 8:04 pm

alewisdvm wrote:So, of course, it is never smart to chase the market.
Stop right there.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.
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Re: When market drops....shifting funds?

Postby Ed 2 » Thu Jan 31, 2013 8:15 pm

Here we go again.))) Thank you God for making us (bogleheads) a tiny minority of all the "smart"crowd :D :happy
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Re: When market drops....shifting funds?

Postby alewisdvm » Thu Jan 31, 2013 8:40 pm

okay okay!!!!
I get the point.
If you look at any of my other posts, you'll see I am truly dedicated to understanding and implementing long-term good asset allocation.

I want to be one of the smart people.
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Re: When market drops....shifting funds?

Postby zebrafish » Fri Feb 01, 2013 12:44 am

We all get weak sometimes, my son.

Go pray the Boglery 100 times, and we shall absolve your sins.
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Re: When market drops....shifting funds?

Postby leonard » Fri Feb 01, 2013 5:24 pm

zebrafish wrote:We all get weak sometimes, my son.

Go pray the Boglery 100 times, and we shall absolve your sins.


"Boglery"! Where can I order mine?
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Re: When market drops....shifting funds?

Postby SC Hoosier » Fri Feb 01, 2013 5:43 pm

When the market drops, find all the money you can and buy! Then don't sell. :D
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Re: When market drops....shifting funds?

Postby jwa » Fri Feb 01, 2013 5:59 pm

When is the market going to drop? I need to know. :oops:
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Re: When market drops....shifting funds?

Postby minesweep » Fri Feb 01, 2013 7:48 pm

alewisdvm wrote:So, of course, it is never smart to chase the market.
But, hypothetically.
If you have a few vanguard index funds, and the market is suspected to head again in to a recession, in theory, where would you move the assets of the index fund ira's and 401k's?
Could you just move into bonds temporarily?

Dictionary definition of the word "suspected":

Have an idea or impression of the existence, presence, or truth of (something) without certain proof.

Mike
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