Invested in 100% Stocks for 401k. Is it time to move those funds to more conservative fund?

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wzzp144
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Invested in 100% Stocks for 401k. Is it time to move those funds to more conservative fund?

Post by wzzp144 »

Hello all,

I currently have my 401k and Roth in all stocks. I understand the market is falling. Would it be wise to move all those funds to a more conservative fund for next 3-4 months? I do not want my investments falling at a high rate.

Any insight would help.

Thanks.
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RootSki
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Re: Invested in 100% Stocks for 401k. Is it time to move those funds to more conservative fund?

Post by RootSki »

So you will be buying high and selling low?
chevca
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Re: Invested in 100% Stocks for 401k. Is it time to move those funds to more conservative fund?

Post by chevca »

Why did you pick 100% stocks in the first place?

No, it would not be wise to move everything now and think you would know when to get back in. That would be market timing.

It would be wise to just keep on buying more stocks with each paycheck though.

Maybe you need to consider if 100% stocks is right for you?
Pseybert
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Re: Invested in 100% Stocks for 401k. Is it time to move those funds to more conservative fund?

Post by Pseybert »

Nope. That time was yesterday. Today begins the 50% slide so now your have to ride it.
BoggledHead2
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Re: Invested in 100% Stocks for 401k. Is it time to move those funds to more conservative fund?

Post by BoggledHead2 »

wzzp144 wrote: Thu Mar 05, 2020 9:22 am Hello all,

I currently have my 401k and Roth in all stocks. I understand the market is falling. Would it be wise to move all those funds to a more conservative fund for next 3-4 months? I do not want my investments falling at a high rate.

Any insight would help.

Thanks.
10+ years to retirement? No.
Near retirement? You shouldn’t be 100% stocks in the first place
Rebalancing after a downturn is pretty much the worst time to rebalance (you bought high / sold low)
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watchnerd
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Re: Invested in 100% Stocks for 401k. Is it time to move those funds to more conservative fund?

Post by watchnerd »

wzzp144 wrote: Thu Mar 05, 2020 9:22 am Hello all,

I currently have my 401k and Roth in all stocks. I understand the market is falling. Would it be wise to move all those funds to a more conservative fund for next 3-4 months? I do not want my investments falling at a high rate.

Any insight would help.

Thanks.
Age? How far are you from retirement?
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retiredjg
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Re: Invested in 100% Stocks for 401k. Is it time to move those funds to more conservative fund?

Post by retiredjg »

wzzp144 wrote: Thu Mar 05, 2020 9:22 am I currently have my 401k and Roth in all stocks. I understand the market is falling. Would it be wise to move all those funds to a more conservative fund for next 3-4 months? I do not want my investments falling at a high rate.
No it would not be wise.

If you find that your portfolio is too aggressive for you, you should adjust your stock to bond ratio and leave it there. Switching back and forth does not work. Invest in a way that you are comfortable in both the good times and the bad times.
delamer
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Re: Invested in 100% Stocks for 401k. Is it time to move those funds to more conservative fund?

Post by delamer »

You really need to review this section of the wiki: https://www.bogleheads.org/wiki/Boglehe ... philosophy

What you are proposing is the antithesis of the Boglehead philosophy.
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ruralavalon
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Re: Invested in 100% Stocks for 401k. Is it time to move those funds to more conservative fund?

Post by ruralavalon »

wzzp144 wrote: Thu Mar 05, 2020 9:22 am Hello all,

I currently have my 401k and Roth in all stocks. I understand the market is falling. Would it be wise to move all those funds to a more conservative fund for next 3-4 months? I do not want my investments falling at a high rate.

Any insight would help.

Thanks.
Why are you 100% in stocks? I'm my opinion 100% stocks is a bad idea.

If that's too risky for you why change for just 3-4 months?

Switching back and forth is a very bad idea, in my opinion.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started
carminered2019
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Re: Invested in 100% Stocks for 401k. Is it time to move those funds to more conservative fund?

Post by carminered2019 »

Absolutely not a problem with 100% stocks but since you posted the question then it's not for you but a change now is a loss.
Last edited by carminered2019 on Thu Mar 05, 2020 1:24 pm, edited 1 time in total.
tdmp
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Re: Invested in 100% Stocks for 401k. Is it time to move those funds to more conservative fund?

Post by tdmp »

Unless your risk tolerance base on ability,need, and willingness to take risk have changed; and if so, then the question is why it has changed? ie. life changing events: job loss, divorce, illness, unexpected expense, etc...if those things are the reasons then certainly changing asset allocation would be appropriate. If not, then maybe you OVERESTIMATED your risk tolerance and probably should have been 90/10, 80/20, 70/30, 60/40, 50/50 etc. If that is the case then you should re-evaluate your risk tolerance and act accordingly and have a SOLID IPS. Selling high and buying low; and try to time the market for later is not a good idea.
-I don't think people can time the market consistently even John Bogle says so https://www.youtube.com/watch?v=AWQxKDznEbk
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1789
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Re: Invested in 100% Stocks for 401k. Is it time to move those funds to more conservative fund?

Post by 1789 »

It seems you don't have a stomach for 100% stocks (assuming you have already cash in EF for bad days). For 100% stock people, i believe these days should be random noise. I think you need to change you AA and weight some bonds now or later and find the sweet spot for yourself.
"My conscience wants vegetarianism to win over the world. And my subconscious is yearning for a piece of juicy meat. But what do i want?" (Andrei Tarkovsky)
tdmp
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Re: Invested in 100% Stocks for 401k. Is it time to move those funds to more conservative fund?

Post by tdmp »

tdmp wrote: Thu Mar 05, 2020 11:17 am Unless your risk tolerance base on ability,need, and willingness to take risk have changed; and if so, then the question is why it has changed? ie. life changing events: job loss, divorce, illness, unexpected expense, etc...if those things are the reasons then certainly changing asset allocation would be appropriate. If not, then maybe you OVERESTIMATED your risk tolerance and probably should have been 90/10, 80/20, 70/30, 60/40, 50/50 etc. If that is the case then you should re-evaluate your risk tolerance and act accordingly and have a SOLID IPS. Selling high and buying low; and try to time the market for later is not a good idea.
-I don't think people can time the market consistently even John Bogle says so https://www.youtube.com/watch?v=AWQxKDznEbk
correction: "selling high and buying low" ; it should say: selling low and buying high is opposite of what should be done.
InvestingGeek
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Re: Invested in 100% Stocks for 401k. Is it time to move those funds to more conservative fund?

Post by InvestingGeek »

wzzp144 wrote: Thu Mar 05, 2020 9:22 am Hello all,

I currently have my 401k and Roth in all stocks. I understand the market is falling. Would it be wise to move all those funds to a more conservative fund for next 3-4 months? I do not want my investments falling at a high rate.

Any insight would help.

Thanks.
If you put all your money in stocks, I'm assuming it's because you expected these companies to be profitable and provide good returns in future. What changed today that you would want to take the money out?

The market falls and the market rises - it's a bit irrelevant to the underlying businesses and your expectations from your investments in retirement. You don't stop living in your house and sell it off because house prices fell, do you?
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wzzp144
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Re: Invested in 100% Stocks for 401k. Is it time to move those funds to more conservative fund?

Post by wzzp144 »

Hi guys,

I am 29. I started when i was 25. I got long ways for retirement. I know it may not be the best thing to do 100% in stocks, but i did want to be aggressive.

-In my 401k, if i sold today i would be sitting at a profit of $3100. I do not want to lose more than i would in next few days, therefore thought about switching to conservative for couple of months.

-In my Roth, last time i bought in October 2019 was at $277/share. It is $289/share right now. I have never bought past $277, I am not losing any much.

Changing would just prevent me from losing more.

Would this still be a wise thing to do. or is it recommended to wait it out?
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watchnerd
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Re: Invested in 100% Stocks for 401k. Is it time to move those funds to more conservative fund?

Post by watchnerd »

wzzp144 wrote: Thu Mar 05, 2020 1:22 pm Hi guys,

I am 29. I started when i was 25. I got long ways for retirement. I know it may not be the best thing to do 100% in stocks, but i did want to be aggressive.

-In my 401k, if i sold today i would be sitting at a profit of $3100. I do not want to lose more than i would in next few days, therefore thought about switching to conservative for couple of months.

-In my Roth, last time i bought in October 2019 was at $277/share. It is $289/share right now. I have never bought past $277, I am not losing any much.

Changing would just prevent me from losing more.

Would this still be a wise thing to do. or is it recommended to wait it out?
You can't touch the funds in your 401k until 59.5 without penalty.

You should stay fully invested. You have 30 years to wait.
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WarAdmiral
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Re: Invested in 100% Stocks for 401k. Is it time to move those funds to more conservative fund?

Post by WarAdmiral »

watchnerd wrote: Thu Mar 05, 2020 1:28 pm
wzzp144 wrote: Thu Mar 05, 2020 1:22 pm Hi guys,

I am 29. I started when i was 25. I got long ways for retirement. I know it may not be the best thing to do 100% in stocks, but i did want to be aggressive.

-In my 401k, if i sold today i would be sitting at a profit of $3100. I do not want to lose more than i would in next few days, therefore thought about switching to conservative for couple of months.

-In my Roth, last time i bought in October 2019 was at $277/share. It is $289/share right now. I have never bought past $277, I am not losing any much.

Changing would just prevent me from losing more.

Would this still be a wise thing to do. or is it recommended to wait it out?
You can't touch the funds in your 401k until 59.5 without penalty.

You should stay fully invested. You have 30 years to wait.
Agree. Stay fully invested and continue to invest regularly regardless of what the market is doing. Time in on your side.
carminered2019
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Re: Invested in 100% Stocks for 401k. Is it time to move those funds to more conservative fund?

Post by carminered2019 »

wzzp144 wrote: Thu Mar 05, 2020 1:22 pm Hi guys,

I am 29. I started when i was 25. I got long ways for retirement. I know it may not be the best thing to do 100% in stocks, but i did want to be aggressive.

-In my 401k, if i sold today i would be sitting at a profit of $3100. I do not want to lose more than i would in next few days, therefore thought about switching to conservative for couple of months.

-In my Roth, last time i bought in October 2019 was at $277/share. It is $289/share right now. I have never bought past $277, I am not losing any much.

Changing would just prevent me from losing more.

Would this still be a wise thing to do. or is it recommended to wait it out?
my 100% equities in 401K from 1995 to 2019 with DCA made over 375% return and I did not sell anything within that 25 years. You will lose more $$$ by jumping in and out of the market but if you sell now then you better rethink your AA.
Last edited by carminered2019 on Thu Mar 05, 2020 1:56 pm, edited 1 time in total.
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ruralavalon
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Re: Invested in 100% Stocks for 401k. Is it time to move those funds to more conservative fund?

Post by ruralavalon »

wzzp144 wrote: Thu Mar 05, 2020 1:22 pm Hi guys,

I am 29. I started when i was 25. I got long ways for retirement. I know it may not be the best thing to do 100% in stocks, but i did want to be aggressive.

-In my 401k, if i sold today i would be sitting at a profit of $3100. I do not want to lose more than i would in next few days, therefore thought about switching to conservative for couple of months.

-In my Roth, last time i bought in October 2019 was at $277/share. It is $289/share right now. I have never bought past $277, I am not losing any much.

Changing would just prevent me from losing more.

Would this still be a wise thing to do. or is it recommended to wait it out?
You asked "is it time to move those funds to a more conservative fund" "for next 3-4 months?"

If you want to be more conservative, then switch to a more conservative asset allocation and stay there. Don't be switching back and forth based on what the stock market is currently doing at any particular time.

In my opinion an investing question using the word "time" is probably the wrong question. The question should probably be "am I using the wrong asset allocation?" The answer is probably " yes".
. . . I know it may not be the best thing to do 100% in stocks, but i did want to be aggressive. . . .
So why not switch to something like 80/20 and stick with it long-term?
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started
sthadani
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Re: Invested in 100% Stocks for 401k. Is it time to move those funds to more conservative fund?

Post by sthadani »

wzzp144 wrote: Thu Mar 05, 2020 1:22 pm Hi guys,

I am 29. I started when i was 25. I got long ways for retirement. I know it may not be the best thing to do 100% in stocks, but i did want to be aggressive.

-In my 401k, if i sold today i would be sitting at a profit of $3100. I do not want to lose more than i would in next few days, therefore thought about switching to conservative for couple of months.

-In my Roth, last time i bought in October 2019 was at $277/share. It is $289/share right now. I have never bought past $277, I am not losing any much.

Changing would just prevent me from losing more.

Would this still be a wise thing to do. or is it recommended to wait it out?
OP,
You are only losing money if you cash out. Right now you still own the same number of shares as you did before just at a lower value. That value over the next 20-30 years will go up. Why would you want to reduce the number of shares you own?
The first poster who responded to your question was absolutely right. What you are thinking of doing if the exact definition of Buy high and sell low. You want to buy low and sell high (at retirement).
You shouldn't care if the market is up or down, right now stocks are on sale. Wouldn't you buy more of a commodity if it were on sale? rather than buy it later when the price went back up? Stay the course and keep accumulating more shares.
For the record, I'm 100% stock too. This is just noise to me. I don't lose sleep at night because of this. But this might be a good lesson for you as you are now learning who you are as an investor and your apetite for risk.
Good luck!
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Re: Invested in 100% Stocks for 401k. Is it time to move those funds to more conservative fund?

Post by abuss368 »

So buying high and selling low?

Now is the time to buy more stock while it is down.
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Re: Invested in 100% Stocks for 401k. Is it time to move those funds to more conservative fund?

Post by stocknoob4111 »

chevca wrote: Thu Mar 05, 2020 9:33 am Why did you pick 100% stocks in the first place?
because a TON of people in this super long bull market have completely forgotten that equities can have extremely sharp declines. I know a lot of people who are 100% stocks which I think is fine if you understand the risks, have a plan and that you have accepted that you will ride out any 50+% declines.
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Re: Invested in 100% Stocks for 401k. Is it time to move those funds to more conservative fund?

Post by David Jay »

abuss368 wrote: Thu Mar 05, 2020 1:58 pmNow is the time to buy more stock while it is down.
This is the correct perspective. If stocks stay low for a while, your withholding contributions will purchase more value now.

The primary determinant of portfolio value in your early investment years is contributions, not market return.
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Re: Invested in 100% Stocks for 401k. Is it time to move those funds to more conservative fund?

Post by JoeRetire »

wzzp144 wrote: Thu Mar 05, 2020 1:22 pm Changing would just prevent me from losing more.
If the thought of "losing more" worries you that much, you should change to a more conservative fund - permanently. You should not have been in 100% stock if you don't have the stomach for some ups and downs.
It's the end of the world as we know it. | It's the end of the world as we know it. | It's the end of the world as we know it. | And I feel fine.
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Re: Invested in 100% Stocks for 401k. Is it time to move those funds to more conservative fund?

Post by abuss368 »

David Jay wrote: Thu Mar 05, 2020 2:08 pm
abuss368 wrote: Thu Mar 05, 2020 1:58 pmNow is the time to buy more stock while it is down.
This is the correct perspective. If stocks stay low for a while, your withholding contributions will purchase more value now.

The primary determinant of portfolio value in your early investment years is contributions, not market return.
Well said. Yes those early years can be tough where it is mostly contributions.
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rbaldini
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Re: Invested in 100% Stocks for 401k. Is it time to move those funds to more conservative fund?

Post by rbaldini »

Sounds like you're doing it because you expect the market to keep falling. You don't actually have any clue what the market is going to do, so you might reconsider that decision.

If instead you are doing it because you happened to recently realize that need to be more conservative with your investments - that 100% was a mistake to being with - then go for it.

Of course sometimes our brain is just rationalizing what our guy is saying, so even if you think the latter is true, be careful. Overreacting to every little market swing generally will cause you to be slightly worse off than if you have just picked an allocation somewhere in the middle and stuck with it.
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wzzp144
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Re: Invested in 100% Stocks for 401k. Is it time to move those funds to more conservative fund?

Post by wzzp144 »

Okay thanks for everybody's helpful insight. I was only going to exchange my stock fund for a more conservative fund for next few months.

I understood the risk and am fine with the up and downs, but I wanted to see if exchanging stock to conservative fund is wise during this time since everything is falling and considering I am still at a gain, and no losses yet.

I will stay where I am at with 100% stocks.
Pseybert
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Re: Invested in 100% Stocks for 401k. Is it time to move those funds to more conservative fund?

Post by Pseybert »

Dude, go more conservative. Things will tank in the next 4 months.
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watchnerd
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Re: Invested in 100% Stocks for 401k. Is it time to move those funds to more conservative fund?

Post by watchnerd »

Pseybert wrote: Thu Mar 05, 2020 4:26 pm Dude, go more conservative. Things will tank in the next 4 months.
Who cares what happens in the next 4 months if you're waiting 10+ years?
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RonSwanson
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Re: Invested in 100% Stocks for 401k. Is it time to move those funds to more conservative fund?

Post by RonSwanson »

At this stage, don't worry about your gains and losses. Worry about how much you are contributing. If stocks tank 50%, how long does it take you to make up this loss with contributions? For some people it is a few months. For others, it is more years than they have left in life... hence not being 100% stocks for them :)
FIBoston
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Re: Invested in 100% Stocks for 401k. Is it time to move those funds to more conservative fund?

Post by FIBoston »

What exactly are you actually losing right now? You're 29 and not accessing those funds anytime soon. For now it's just all numbers. Don't sell, that would be dumb.

Selling now guarantees a loss. If anything it's time to buy more.
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watchnerd
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Re: Invested in 100% Stocks for 401k. Is it time to move those funds to more conservative fund?

Post by watchnerd »

FIBoston wrote: Thu Mar 05, 2020 5:03 pm What exactly are you actually losing right now? You're 29 and not accessing those funds anytime soon. For now it's just all numbers. Don't sell, that would be dumb.

Selling now guarantees a loss. If anything it's time to buy more.
I'm 49 and I still don't care what happens over the next few years.

I care about 10 years from now.
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