Moving to Cash?

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Thegame14
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Moving to Cash?

Post by Thegame14 »

Dow is 28,000, with an all time high pre corona virus of 29,000, it seems irrational to have the Dow only 3ish% off the all time high with so many unemployed, no end to corona in sight, rising national debt, retail is a mess, real estate especially commercial is a mess. I am thinking it is best to move my equities in my 401k's and IRA to cash for a while. I don't see any more upside to this market but plenty of downside especially when schools shutdown and another likely national shut down, so what are the best funds to park to be similar to cash? Does each 401K have a cash fund? should I leave bonds alone or also move to cash?

Thanks
livesoft
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Re: Moving to Cash?

Post by livesoft »

In contrast, I am incredibly optimistic because of all the changes that are on the horizon. I don't have any cash and I am not moving to cash.

I'm sure your 401(k) has cash-like choices. Why not look at them and tell us what they are?
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mmac8
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Re: Moving to Cash?

Post by mmac8 »

You will find what you are talking about doing to be a very unpopular opinion around here. Today’s highs are tomorrow lows.

To answer your question, I would think Vanguard has some sort of MM fund. When talking about cash like entities I’m not sure one could be much better than the other in regards to rate or return if you are looking at it that way.
Last edited by mmac8 on Tue Aug 11, 2020 10:20 am, edited 1 time in total.
retired@50
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Re: Moving to Cash?

Post by retired@50 »

Maybe a stable value fund in your retirement account at work?

Personally, I'll stay invested.

Regards,
This is one person's opinion. Nothing more.
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anon_investor
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Re: Moving to Cash?

Post by anon_investor »

Thegame14 wrote: Tue Aug 11, 2020 10:14 am Dow is 28,000, with an all time high pre corona virus of 29,000, it seems irrational to have the Dow only 3ish% off the all time high with so many unemployed, no end to corona in sight, rising national debt, retail is a mess, real estate especially commercial is a mess. I am thinking it is best to move my equities in my 401k's and IRA to cash for a while. I don't see any more upside to this market but plenty of downside especially when schools shutdown and another likely national shut down, so what are the best funds to park to be similar to cash? Does each 401K have a cash fund? should I leave bonds alone or also move to cash?

Thanks
Question, let's say you sell all to cash today. When will you jump back into the market? Market timing is a tough game...
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simplesimon
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Re: Moving to Cash?

Post by simplesimon »

Thegame14 wrote: Tue Aug 11, 2020 10:14 am Dow is 28,000, with an all time high pre corona virus of 29,000, it seems irrational to have the Dow only 3ish% off the all time high with so many unemployed, no end to corona in sight, rising national debt, retail is a mess, real estate especially commercial is a mess. I am thinking it is best to move my equities in my 401k's and IRA to cash for a while. I don't see any more upside to this market but plenty of downside especially when schools shutdown and another likely national shut down, so what are the best funds to park to be similar to cash? Does each 401K have a cash fund? should I leave bonds alone or also move to cash?

Thanks
viewtopic.php?p=5382858#p5382858

Look at where retail and real estate stock prices are today vs their peaks.
Last edited by simplesimon on Tue Aug 11, 2020 10:24 am, edited 1 time in total.
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Marmot
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Re: Moving to Cash?

Post by Marmot »

Not moving to cash.
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whodidntante
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Re: Moving to Cash?

Post by whodidntante »

I guess that's why they call it the equity risk premium. To get the premium, you have to take the risk. If you've discovered the level of risk you are taking is too high for you, today would be an excellent day to reduce your allocation to stocks. But jumping in and out of the market based on your gut is likely to lead to indigestion.

What will you do if the DOW goes to 60,000 while you still have your cash paying a half a percent?

I don't know you. Maybe you're not cut out to own stocks. A lot of people retire without ever having owned stocks. I think that's the hard way to do it, and I also think that almost everyone would be better off with some allocation to stocks. But the mantra that owning stocks is the right way to invest is also just an opinion. You can go buy rental properties, commercial properties, farmland, and use fixed income to get there also. You can even just save a lot and earn a half a percent and eventually end up with enough to retire unless inflation shows up in a big way.
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Sandtrap
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Re: Moving to Cash?

Post by Sandtrap »

Here's 2 fun market timing games to check one's skill levels.
https://qz.com/487013/this-game-will-sh ... right-now/
Another fun one.
https://engaging-data.com/market-timing-game/

j :D
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Independent George
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Re: Moving to Cash?

Post by Independent George »

Good reasons to move to cash right now:

1. Concern about job security/wages in an uncertain environment
2. Preparation for sudden Corona-related medical expenses
3. Preparation for sudden repair expenses due to civil unrest

Bad reasons to move to cash right now:
1. Market timing
2. Market timing
3. Market timing
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Toons
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Re: Moving to Cash?

Post by Toons »

Do Nothing,
Keep Doing what you are doing.
Equities.
:happy
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Pete12
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Re: Moving to Cash?

Post by Pete12 »

No. Asset Allocation is currently at 75% stocks 25% bonds and I sleep very well at night. Have at least 6 months expenses in cash for an emergency fund.

It's not always easy especially given all the market turmoil lately. Whenever I need a reminder I simply pick a Jack Bogle video to watch, for example this one:

https://www.youtube.com/watch?v=BnqlGHZwveE

Even from beyond the grave, his advice is timeless.

Best of luck,
Pete
CZjc1330
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Re: Moving to Cash?

Post by CZjc1330 »

No, don't rush into cash.
But I appreciate your thinking.
Over the past 2 years I moved enough into cash to live for 3 years w/o diminishing quality of life, etc.
If market falls, which I think it will, I will not have to sell stocks at reduced prices.
If market goes up. There is enough invested to benefit.
Buy Costco 12 yr scotch, very smooth and very inexpensive!
Cash is King
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Re: Moving to Cash?

Post by Cash is King »

I think when you're tempted to make big moves like this, consider it may be prudent to do some tweaking to the weighting of your portfolio. You should have a diversified portfolio to absorb the occasional volatility but It's your money. There's an old phase that says "time in the market beats timing the market". Best of luck.
Elysium
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Re: Moving to Cash?

Post by Elysium »

Thegame14 wrote: Tue Aug 11, 2020 10:14 am Dow is 28,000, with an all time high pre corona virus of 29,000, it seems irrational to have the Dow only 3ish% off the all time high with so many unemployed, no end to corona in sight, rising national debt, retail is a mess, real estate especially commercial is a mess. I am thinking it is best to move my equities in my 401k's and IRA to cash for a while. I don't see any more upside to this market but plenty of downside especially when schools shutdown and another likely national shut down, so what are the best funds to park to be similar to cash? Does each 401K have a cash fund? should I leave bonds alone or also move to cash?

Thanks
I am betting on Dow 40,000, before I retire, since my investments are mainly for retirement should I sell now when there is so much more to come?
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cashboy
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Re: Moving to Cash?

Post by cashboy »

'do' what allows 'you' to sleep well at night. If you are not comfortable with where you are with your AA then change it (and i mean that in a nice way).

me, i have been, and will be, staying the course. For example, March was brutal (and in some ways terrifying at times) , but i stayed the course and have almost recovered (without changing a thing).
Last edited by cashboy on Tue Aug 11, 2020 11:15 am, edited 1 time in total.
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Marmot
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Re: Moving to Cash?

Post by Marmot »

Cash is King wrote: Tue Aug 11, 2020 11:11 am I think when you're tempted to make big moves like this, consider it may be prudent to do some tweaking to the weighting of your portfolio. You should have a diversified portfolio to absorb the occasional volatility but It's your money. There's an old phase that says "time in the market beats timing the market". Best of luck.
Funny coming from "Cash is King" :)
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Topic Author
Thegame14
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Re: Moving to Cash?

Post by Thegame14 »

anon_investor wrote: Tue Aug 11, 2020 10:22 am
Thegame14 wrote: Tue Aug 11, 2020 10:14 am Dow is 28,000, with an all time high pre corona virus of 29,000, it seems irrational to have the Dow only 3ish% off the all time high with so many unemployed, no end to corona in sight, rising national debt, retail is a mess, real estate especially commercial is a mess. I am thinking it is best to move my equities in my 401k's and IRA to cash for a while. I don't see any more upside to this market but plenty of downside especially when schools shutdown and another likely national shut down, so what are the best funds to park to be similar to cash? Does each 401K have a cash fund? should I leave bonds alone or also move to cash?

Thanks
Question, let's say you sell all to cash today. When will you jump back into the market? Market timing is a tough game...
that is my worry, I just cant believe the economy is only 3% worse off now than pre corona virus, we have national debt rising faster than ever, retail apocalypse, millions without jobs, tens of millions facing eviction once the ban is lifted, commercial real estate is ruined with everyone working from home, and corona virus they say wont go away for 100 years, and a vaccine will likely only be 40-60% effective at best, and we will be wearing masks in perpetuity. Then add in the election which I think either way is going to be a disaster....
MotoTrojan
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Re: Moving to Cash?

Post by MotoTrojan »

How much cash was the fed and congress injecting pre-COVID?

If the fact that we are approaching prior highs is making you uncomfortable, perhaps consider tilting to small/value or ex-US instead. Has a ways to go to it's 2018 ATH...
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ofcmetz
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Re: Moving to Cash?

Post by ofcmetz »

Toons wrote: Tue Aug 11, 2020 10:30 am Do Nothing,
Keep Doing what you are doing.
Equities.
:happy
I second this.

If you don't have anything in fixed income, then now might be the time to revisit your overall location.

Market timing with your retirement accounts is not wise.
Never underestimate the power of the force of low cost index funds.
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anon_investor
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Re: Moving to Cash?

Post by anon_investor »

Thegame14 wrote: Tue Aug 11, 2020 11:16 am
anon_investor wrote: Tue Aug 11, 2020 10:22 am
Thegame14 wrote: Tue Aug 11, 2020 10:14 am Dow is 28,000, with an all time high pre corona virus of 29,000, it seems irrational to have the Dow only 3ish% off the all time high with so many unemployed, no end to corona in sight, rising national debt, retail is a mess, real estate especially commercial is a mess. I am thinking it is best to move my equities in my 401k's and IRA to cash for a while. I don't see any more upside to this market but plenty of downside especially when schools shutdown and another likely national shut down, so what are the best funds to park to be similar to cash? Does each 401K have a cash fund? should I leave bonds alone or also move to cash?

Thanks
Question, let's say you sell all to cash today. When will you jump back into the market? Market timing is a tough game...
that is my worry, I just cant believe the economy is only 3% worse off now than pre corona virus, we have national debt rising faster than ever, retail apocalypse, millions without jobs, tens of millions facing eviction once the ban is lifted, commercial real estate is ruined with everyone working from home, and corona virus they say wont go away for 100 years, and a vaccine will likely only be 40-60% effective at best, and we will be wearing masks in perpetuity. Then add in the election which I think either way is going to be a disaster....
I think it is foolish to time the market. Just look at what happened in Feb/March and the incredible rebound since. Personally, I make sure to have a large enough cash emergency fund to sleep well at night, and I invest the rest at my desired AA.
dbr
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Re: Moving to Cash?

Post by dbr »

For example my 401k has a stable value fund and a money market fund. It does not have any short term bond funds, which work the same for the purpose. My 401k also has a directed brokerage link to most mutual funds and ETFs including various money market funds. I am not sure if the broker allows brokered CDs.
MDfan
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Re: Moving to Cash?

Post by MDfan »

Thegame14 wrote: Tue Aug 11, 2020 11:16 am
anon_investor wrote: Tue Aug 11, 2020 10:22 am
Thegame14 wrote: Tue Aug 11, 2020 10:14 am Dow is 28,000, with an all time high pre corona virus of 29,000, it seems irrational to have the Dow only 3ish% off the all time high with so many unemployed, no end to corona in sight, rising national debt, retail is a mess, real estate especially commercial is a mess. I am thinking it is best to move my equities in my 401k's and IRA to cash for a while. I don't see any more upside to this market but plenty of downside especially when schools shutdown and another likely national shut down, so what are the best funds to park to be similar to cash? Does each 401K have a cash fund? should I leave bonds alone or also move to cash?

Thanks
Question, let's say you sell all to cash today. When will you jump back into the market? Market timing is a tough game...
that is my worry, I just cant believe the economy is only 3% worse off now than pre corona virus, we have national debt rising faster than ever, retail apocalypse, millions without jobs, tens of millions facing eviction once the ban is lifted, commercial real estate is ruined with everyone working from home, and corona virus they say wont go away for 100 years, and a vaccine will likely only be 40-60% effective at best, and we will be wearing masks in perpetuity. Then add in the election which I think either way is going to be a disaster....


Damn, talk about a Debbie Downer. You may want to go back to March and read some of the posts from the people who did the exact same thing you are planning to do. And see how that worked out for them. You're asking about market timing on a board where 99% of the posters don't believe in it.
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Thegame14
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Re: Moving to Cash?

Post by Thegame14 »

MDfan wrote: Tue Aug 11, 2020 11:39 am
Thegame14 wrote: Tue Aug 11, 2020 11:16 am
anon_investor wrote: Tue Aug 11, 2020 10:22 am
Thegame14 wrote: Tue Aug 11, 2020 10:14 am Dow is 28,000, with an all time high pre corona virus of 29,000, it seems irrational to have the Dow only 3ish% off the all time high with so many unemployed, no end to corona in sight, rising national debt, retail is a mess, real estate especially commercial is a mess. I am thinking it is best to move my equities in my 401k's and IRA to cash for a while. I don't see any more upside to this market but plenty of downside especially when schools shutdown and another likely national shut down, so what are the best funds to park to be similar to cash? Does each 401K have a cash fund? should I leave bonds alone or also move to cash?

Thanks
Question, let's say you sell all to cash today. When will you jump back into the market? Market timing is a tough game...
that is my worry, I just cant believe the economy is only 3% worse off now than pre corona virus, we have national debt rising faster than ever, retail apocalypse, millions without jobs, tens of millions facing eviction once the ban is lifted, commercial real estate is ruined with everyone working from home, and corona virus they say wont go away for 100 years, and a vaccine will likely only be 40-60% effective at best, and we will be wearing masks in perpetuity. Then add in the election which I think either way is going to be a disaster....
Damn, talk about a Debbie Downer. You may want to go back to March and read some of the posts from the people who did the exact same thing you are planning to do. And see how that worked out for them. You're asking about market timing on a board where 99% of the posters don't believe in it.
Right but then there must also have been people who when real estate was insane said this doesn't make sense, how can people get these loans with no jobs and no money down and this doesn't make sense and took some money off the table.

Tell me how we can only be 3% worse off now than we were pre-corona virus?
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anon_investor
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Re: Moving to Cash?

Post by anon_investor »

Thegame14 wrote: Tue Aug 11, 2020 11:42 am
MDfan wrote: Tue Aug 11, 2020 11:39 am
Thegame14 wrote: Tue Aug 11, 2020 11:16 am
anon_investor wrote: Tue Aug 11, 2020 10:22 am
Thegame14 wrote: Tue Aug 11, 2020 10:14 am Dow is 28,000, with an all time high pre corona virus of 29,000, it seems irrational to have the Dow only 3ish% off the all time high with so many unemployed, no end to corona in sight, rising national debt, retail is a mess, real estate especially commercial is a mess. I am thinking it is best to move my equities in my 401k's and IRA to cash for a while. I don't see any more upside to this market but plenty of downside especially when schools shutdown and another likely national shut down, so what are the best funds to park to be similar to cash? Does each 401K have a cash fund? should I leave bonds alone or also move to cash?

Thanks
Question, let's say you sell all to cash today. When will you jump back into the market? Market timing is a tough game...
that is my worry, I just cant believe the economy is only 3% worse off now than pre corona virus, we have national debt rising faster than ever, retail apocalypse, millions without jobs, tens of millions facing eviction once the ban is lifted, commercial real estate is ruined with everyone working from home, and corona virus they say wont go away for 100 years, and a vaccine will likely only be 40-60% effective at best, and we will be wearing masks in perpetuity. Then add in the election which I think either way is going to be a disaster....
Damn, talk about a Debbie Downer. You may want to go back to March and read some of the posts from the people who did the exact same thing you are planning to do. And see how that worked out for them. You're asking about market timing on a board where 99% of the posters don't believe in it.
Right but then there must also have been people who when real estate was insane said this doesn't make sense, how can people get these loans with no jobs and no money down and this doesn't make sense and took some money off the table.

Tell me how we can only be 3% worse off now than we were pre-corona virus?
The stock market does not represent the economy. Also, while the S&P500 or Total Stock Market index may be within 3% of all time highs, not all stocks are 3% from all time highs. In particular big tech stocks are way above those Februray levels, and other companies severely impacted by COVID are way below those levels. The overall index maybe only 3% off, but under the covers the composition is much different.
b42
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Re: Moving to Cash?

Post by b42 »

Instead of moving to cash, how about selling some stock and buying bonds? That will help lover the overall risk of the portfolio.
livesoft
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Re: Moving to Cash?

Post by livesoft »

Evictions have to work their way through the courts and the office of sheriffs. Landlords are not going to like it, but they are a very small percentage of the population. The debt doesn't matter because, well, the US government wastes a lot of money anyways, and the US is very wealthy, so there is money to be discovered all around, but it mostly will come from people out of power. Masks and soaps are cheap. People are going to discover what are important businesses and what are not important.
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dvvader
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Re: Moving to Cash?

Post by dvvader »

I honestly don't understand these threads. There are literally dozens of threads just from the past 6 months asking this same question, some of which have several pages of responses saying the same thing, "Stay the course", "Market timing is bad", etc. etc. yadda yadda. You know the answer you're going to get, at least you should, so why post?

To answer your question, going to cash is a bad idea. It is a behavioral error that will cost you money in the long run, even if it happens to work this time. The process is more important than the results. A good process will lead to good results. Stay the course and turn off your computer.
TSR
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Re: Moving to Cash?

Post by TSR »

I share your concern, but I don't agree with your solution. I don't think we can predict what the markets will do with any accuracy. Your post did remind me to rebalance my Roth, however. The market run-up had me about $4000 out of whack. Thanks and good luck!
7eight9
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Re: Moving to Cash?

Post by 7eight9 »

Great article in the New York TImes this morning --- Retail Chains Abandon Manhattan: ‘It’s Unsustainable’

For years, Bryant Park Grill & Cafe in Midtown Manhattan has been one of the country’s top-grossing restaurants, the star property in Ark Restaurants’ portfolio of 20 restaurants across the United States.

But what propelled it to the top has vanished.

The tourists are gone, the office towers surrounding it are largely empty and the restaurant’s 1,000-seat dining room is closed. Instead, dinner is cooked and served on its patio, and the scaled-down restaurant brings in about $12,000 a day — an 85 percent plunge in revenue, its chief executive said. ...

Michael Weinstein, the chief executive of Ark Restaurants, who owns Bryant Park Grill & Cafe and 19 other restaurants, said he will never open another restaurant in New York.


https://www.nytimes.com/2020/08/11/nyre ... e=Homepage

I personally have little optimism of things getting better anytime soon and can certainly understand your thinking.

You might want to consider looking at multi-year guaranteed annuities (MYGAs) as they tend to offer attractive rates.

Example --- Fixed Annuity Rates for August 2020 ---https://www.blueprintincome.com/fixed-annuities

Five year rates as high as 3.45% per above link.
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simplesimon
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Re: Moving to Cash?

Post by simplesimon »

Thegame14 wrote: Tue Aug 11, 2020 11:42 am Right but then there must also have been people who when real estate was insane said this doesn't make sense, how can people get these loans with no jobs and no money down and this doesn't make sense and took some money off the table.

Tell me how we can only be 3% worse off now than we were pre-corona virus?
You really should read what I linked earlier. Most sectors are still down, some way down, from the beginning of the year.
minimalistmarc
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Re: Moving to Cash?

Post by minimalistmarc »

7eight9 wrote: Tue Aug 11, 2020 12:12 pm Great article in the New York TImes this morning --- Retail Chains Abandon Manhattan: ‘It’s Unsustainable’

For years, Bryant Park Grill & Cafe in Midtown Manhattan has been one of the country’s top-grossing restaurants, the star property in Ark Restaurants’ portfolio of 20 restaurants across the United States.

But what propelled it to the top has vanished.

The tourists are gone, the office towers surrounding it are largely empty and the restaurant’s 1,000-seat dining room is closed. Instead, dinner is cooked and served on its patio, and the scaled-down restaurant brings in about $12,000 a day — an 85 percent plunge in revenue, its chief executive said. ...

Michael Weinstein, the chief executive of Ark Restaurants, who owns Bryant Park Grill & Cafe and 19 other restaurants, said he will never open another restaurant in New York.


https://www.nytimes.com/2020/08/11/nyre ... e=Homepage

I personally have little optimism of things getting better anytime soon and can certainly understand your thinking.

You might want to consider looking at multi-year guaranteed annuities (MYGAs) as they tend to offer attractive rates.

Example --- Fixed Annuity Rates for August 2020 ---https://www.blueprintincome.com/fixed-annuities

Five year rates as high as 3.45% per above link.
Do tenants move out. Landlords will need to drop the rents. New tenants move in.
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ruralavalon
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Re: Moving to Cash?

Post by ruralavalon »

Thegame14 wrote: Tue Aug 11, 2020 10:14 am Dow is 28,000, with an all time high pre corona virus of 29,000, it seems irrational to have the Dow only 3ish% off the all time high with so many unemployed, no end to corona in sight, rising national debt, retail is a mess, real estate especially commercial is a mess. I am thinking it is best to move my equities in my 401k's and IRA to cash for a while [emphasis added]. I don't see any more upside to this market but plenty of downside especially when schools shutdown and another likely national shut down, so what are the best funds to park to be similar to cash? Does each 401K have a cash fund? should I leave bonds alone or also move to cash?

Thanks
I am making no changes. The stock market and the economy are different things.

Invest for the long-term, not for the short-term. I do not feel that any of the concerns that you listed are permanent conditions.

Holding cash is likely to give a negative real return net of inflation. You plan on cash "for a while", how will you know when it's okay to reinvest? (That is a serious question.)
Last edited by ruralavalon on Tue Aug 11, 2020 1:08 pm, edited 1 time in total.
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Orbuculum Nongata
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Re: Moving to Cash?

Post by Orbuculum Nongata »

livesoft wrote: Tue Aug 11, 2020 10:16 am In contrast, I am incredibly optimistic because of all the changes that are on the horizon. ...I am not moving to cash.
+1 My optimism is high. My allocation is within my risk tolerance. Why change either?
Potential - distraction = performance.
Armoured
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Re: Moving to Cash?

Post by Armoured »

Independent George wrote: Tue Aug 11, 2020 10:29 am Good reasons to move to cash right now:

1. Concern about job security/wages in an uncertain environment
2. Preparation for sudden Corona-related medical expenses
3. Preparation for sudden repair expenses due to civil unrest

Bad reasons to move to cash right now:
1. Market timing
2. Market timing
3. Market timing
I'm pretty new to investing in even a moderately thoughtful manner, but isn't all of the first three items also related to market timing? If this was supposed to be ironic I loved this post. Hope this comment doesn't come across as rude.
Broken Man 1999
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Re: Moving to Cash?

Post by Broken Man 1999 »

I'm investing for my children and grandchildren.

DW and I have a bodacious amount of bond funds. If things go south, well, the DDs and grandkids can point at me and say: "Way to go Papa!" :oops:

There has probably been a thread about moving to cash every day, in some form or another. The question is always sincere, but the answer seldom changes.

Nope.

Broken Man 1999
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Armoured
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Re: Moving to Cash?

Post by Armoured »

Marmot wrote: Tue Aug 11, 2020 11:15 am
Cash is King wrote: Tue Aug 11, 2020 11:11 am I think when you're tempted to make big moves like this, consider it may be prudent to do some tweaking to the weighting of your portfolio. You should have a diversified portfolio to absorb the occasional volatility but It's your money. There's an old phase that says "time in the market beats timing the market". Best of luck.
Funny coming from "Cash is King" :)

LOL :sharebeer

Personally, I'm putting more than usual into our saving accounts.
sam1838
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Re: Moving to Cash?

Post by sam1838 »

When it rebounded to S&P 3000, I doubled my cash holdings. I was convinced that the market would soon drop or at least stop rising. I turned out to be wrong.

While I don't regret increasing my cash, because I do believe I had too little before the pandemic, I'm pretty well convinced at this point that I can't predict the market and I should just pick a strategy that's good, up or down.
bloom2708
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Re: Moving to Cash?

Post by bloom2708 »

Ride the roller coaster up. Ride the roller coaster down. Ride the roller coaster up.

If you are within a couple years of retirement, you could trim your stock allocation to suit your needs.

Otherwise, head down, keep investing. Do this if up, down, or middling. Repeat.
"We are here to provoke thoughtfulness, not agree with you." Unknown Boglehead
klondike
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Re: Moving to Cash?

Post by klondike »

Thegame14 wrote: Tue Aug 11, 2020 10:14 am Dow is 28,000, with an all time high pre corona virus of 29,000, it seems irrational to have the Dow only 3ish% off the all time high with so many unemployed, no end to corona in sight, rising national debt, retail is a mess, real estate especially commercial is a mess. I am thinking it is best to move my equities in my 401k's and IRA to cash for a while. I don't see any more upside to this market but plenty of downside especially when schools shutdown and another likely national shut down, so what are the best funds to park to be similar to cash? Does each 401K have a cash fund? should I leave bonds alone or also move to cash?

Thanks
Nothing worths your sleep at night. Do whatever make you feel comfortable. That said, I'm not going to make abrupt move like that as figuring out when to get back in will cause my sleep at night. Been there done that and will never again.

Good luck
000
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Re: Moving to Cash?

Post by 000 »

Prediction: USD will "magically" depreciate the next time stocks crash.

You may want to look for another haven.
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mrspock
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Re: Moving to Cash?

Post by mrspock »

Threads and posts like this make me thankful most of my holdings are in taxable accounts. You think things through a bit more carefully when “going to cash” means cutting the IRS 6 figure checks.

Even AA changes must be much more judicious, and happen over many months vs just filling out some form on “netbenefits” (401k site).
hightower
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Re: Moving to Cash?

Post by hightower »

Thegame14 wrote: Tue Aug 11, 2020 10:14 am Dow is 28,000, with an all time high pre corona virus of 29,000, it seems irrational to have the Dow only 3ish% off the all time high with so many unemployed, no end to corona in sight, rising national debt, retail is a mess, real estate especially commercial is a mess. I am thinking it is best to move my equities in my 401k's and IRA to cash for a while. I don't see any more upside to this market but plenty of downside especially when schools shutdown and another likely national shut down, so what are the best funds to park to be similar to cash? Does each 401K have a cash fund? should I leave bonds alone or also move to cash?

Thanks
Believe me, I, and many others, share your concerns with the state of the world. But, you have to consider a couple of key points. First, do you need cash for something right now? Do you still have a job? If you don't need cash for anything at the moment and you're still employed, then there's no reason to sell your stocks out of fear of them losing value. You need to switch your thinking to a more long term view. Unless you're close to retirement, you have no reason to care what the value of your shares are. Instead, your focus should be on gathering more shares, especially during the next downturn. If you're employed, leave your stocks alone and keep buying the next time there's a downturn. Shares will be on sale. Who cares if the value of yours is down? You don't need the cash right now, so ignore that. If you're within 5 years of retirement, then that could be different.

The US economy has survived far worse challenges than what we're facing today. The 1918 Spanish flu, WWI, which was immediately followed by the great depression, then a short time later, WWII. Imagine how those investors must have felt. But, the trend even after those events was always UP. It will be up over the next 20 years too. The pandemic is a challenge no doubt, but it's nothing compared to what people have went through in the past. We'll be fine. We'll eventually recover from this and so will the economy.

My plan for dealing with the volatility that may be coming is to have my AA at a mix that I feel comfortable with. For me, 60/30/10 feels right. That way I'm still in the game at 60% stocks, but I have some cash on hand already to deploy during a down turn, and I have bonds I could use to rebalance as well. I feel good with this plan and so far, I've been sticking to it without any temptation to sell. I would consider doing something like this before trying to "go to cash" Cash will just sit there losing value to inflation and you'll struggle to decide when it's best to enter back into the market. Most people miss the mark when they try to time the market, so if you want to gamble with your own money, go ahead and give it a try. But, let us know how you do.
hightower
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Re: Moving to Cash?

Post by hightower »

mrspock wrote: Tue Aug 11, 2020 1:51 pm Threads and posts like this make me thankful most of my holdings are in taxable accounts. You think things through a bit more carefully when “going to cash” means cutting the IRS 6 figure checks.

Even AA changes must be much more judicious, and happen over many months vs just filling out some form on “netbenefits” (401k site).
Damn, so the capital gains on the shares you have in your taxable account are high enough that you'd owe 6 figures to the government if you sold all your shares? Baller right here.
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kelway
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Re: Moving to Cash?

Post by kelway »

Thegame14 wrote: Tue Aug 11, 2020 11:42 am Tell me how we can only be 3% worse off now than we were pre-corona virus?
Trillions in stimulus?
000
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Joined: Thu Jul 23, 2020 12:04 am

Re: Moving to Cash?

Post by 000 »

kelway wrote: Tue Aug 11, 2020 2:03 pm
Thegame14 wrote: Tue Aug 11, 2020 11:42 am Tell me how we can only be 3% worse off now than we were pre-corona virus?
Trillions in stimulus?
This guy gets it.
Wanderingwheelz
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Re: Moving to Cash?

Post by Wanderingwheelz »

Thegame14 wrote: Tue Aug 11, 2020 11:42 am
MDfan wrote: Tue Aug 11, 2020 11:39 am
Thegame14 wrote: Tue Aug 11, 2020 11:16 am
anon_investor wrote: Tue Aug 11, 2020 10:22 am
Thegame14 wrote: Tue Aug 11, 2020 10:14 am Dow is 28,000, with an all time high pre corona virus of 29,000, it seems irrational to have the Dow only 3ish% off the all time high with so many unemployed, no end to corona in sight, rising national debt, retail is a mess, real estate especially commercial is a mess. I am thinking it is best to move my equities in my 401k's and IRA to cash for a while. I don't see any more upside to this market but plenty of downside especially when schools shutdown and another likely national shut down, so what are the best funds to park to be similar to cash? Does each 401K have a cash fund? should I leave bonds alone or also move to cash?

Thanks
Question, let's say you sell all to cash today. When will you jump back into the market? Market timing is a tough game...
that is my worry, I just cant believe the economy is only 3% worse off now than pre corona virus, we have national debt rising faster than ever, retail apocalypse, millions without jobs, tens of millions facing eviction once the ban is lifted, commercial real estate is ruined with everyone working from home, and corona virus they say wont go away for 100 years, and a vaccine will likely only be 40-60% effective at best, and we will be wearing masks in perpetuity. Then add in the election which I think either way is going to be a disaster....
Damn, talk about a Debbie Downer. You may want to go back to March and read some of the posts from the people who did the exact same thing you are planning to do. And see how that worked out for them. You're asking about market timing on a board where 99% of the posters don't believe in it.
Right but then there must also have been people who when real estate was insane said this doesn't make sense, how can people get these loans with no jobs and no money down and this doesn't make sense and took some money off the table.

Tell me how we can only be 3% worse off now than we were pre-corona virus?
Apparently, enough investors who have proper long-term time horizon the be stock owners didn’t die from coronavirus.

That’s my guess as to “how we can only be 3% worse off”.
klondike
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Re: Moving to Cash?

Post by klondike »

hightower wrote: Tue Aug 11, 2020 1:59 pm Damn, so the capital gains on the shares you have in your taxable account are high enough that you'd owe 6 figures to the government if you sold all your shares? Baller right here.
LTCG+NIIT can be very high, i.e. 23.5% or more. It's not hard to cut a substantial 6 dights check to IRS. Liquidating stocks for downpayment of a house in CA will certainly do that. Damn, it hurts....
000
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Re: Moving to Cash?

Post by 000 »

klondike wrote: Tue Aug 11, 2020 2:10 pm
hightower wrote: Tue Aug 11, 2020 1:59 pm Damn, so the capital gains on the shares you have in your taxable account are high enough that you'd owe 6 figures to the government if you sold all your shares? Baller right here.
LTCG+NIIT can be very high, i.e. 23.5% or more. It's not hard to cut a substantial 6 dights check to IRS. Liquidating stocks for downpayment of a house in CA will certainly do that. Damn, it hurts....
I'd rather have 76.5% of 100 than 100% of 0.
livesoft
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Re: Moving to Cash?

Post by livesoft »

dvvader wrote: Tue Aug 11, 2020 12:02 pm I honestly don't understand these threads. There are literally dozens of threads just from the past 6 months asking this same question, ...
When these threads die off is when it might be time to go to cash. :twisted:
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