Is it possible to time the market to invest ?

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Topic Author
Aspiringbogle
Posts: 7
Joined: Tue Mar 27, 2018 8:47 am

Is it possible to time the market to invest ?

Post by Aspiringbogle »

hi All,

I was asking yesterday about moving my company 401k with Merrill Lynch to Merrill Edge / Vanguard IRA.
After talking to the financial advisor of Merrill Lynch/Edge , I have the following options
1 Open a self directed IRA
2. Open an online managed IRA at 0.3 % fees because I am preferred rewards member.
3. Open a one on one advisory managed IRA at 0.7 % fees
4. Open a Roth IRA

As she reviewed my 401 k funds , she mentioned that almost all of the funds were proprietary and hence will have to be cashed out to the IRA except for one of small value and no penalty will be charged for cashing out.

Now since the funds wont transfer as is to the IRA , I am bit skeptical about cashing out the funds that are doing good in the current 401k .
The advisor did say that they don't advise to time the market but left to my discretion .

Is there a way we could time it , sell them high and hold them for a short while before funding the IRA at a low?
Is it advisable to cash out the 401k into the IRA during this time ?

Thanking in anticipation. .
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ipdiddly
Posts: 144
Joined: Fri Jan 01, 2021 11:24 am

Re: Is it possible to time the market to invest ?

Post by ipdiddly »

To answer your initial question, you can only successfully "time the market" if your crystal ball is less than two years old. The older model crystal balls don't work and they are out of warranty. I think there are some good ones on Amazon. They had some great deals for Black Friday.
Fran K
Posts: 77
Joined: Sat Dec 26, 2020 7:50 pm

Re: Is it possible to time the market to invest ?

Post by Fran K »

Aspiringbogle wrote: Tue Jan 12, 2021 5:21 pm hi All,

I was asking yesterday about moving my company 401k with Merrill Lynch to Merrill Edge / Vanguard IRA.
After talking to the financial advisor of Merrill Lynch/Edge , I have the following options
1 Open a self directed IRA
2. Open an online managed IRA at 0.3 % fees because I am preferred rewards member.
3. Open a one on one advisory managed IRA at 0.7 % fees
4. Open a Roth IRA

As she reviewed my 401 k funds , she mentioned that almost all of the funds were proprietary and hence will have to be cashed out to the IRA except for one of small value and no penalty will be charged for cashing out.

Now since the funds wont transfer as is to the IRA , I am bit skeptical about cashing out the funds that are doing good in the current 401k .
The advisor did say that they don't advise to time the market but left to my discretion .

Is there a way we could time it , sell them high and hold them for a short while before funding the IRA at a low?
Is it advisable to cash out the 401k into the IRA during this time ?

Thanking in anticipation. .
This is a classic Peter Lynch quote that I'm pretty sure you're going to find almost everyone here agrees with:

"more people have lost money waiting for corrections and anticipating corrections than in the actual corrections. I mean, trying to predict market highs and lows is not productive."

https://www.fidelity.com/viewpoints/inv ... ctions.%22
My name is Frank.
muffins14
Posts: 461
Joined: Wed Oct 26, 2016 4:14 am

Re: Is it possible to time the market to invest ?

Post by muffins14 »

Aspiringbogle wrote: Tue Jan 12, 2021 5:21 pm
Is there a way we could time it , sell them high and hold them for a short while before funding the IRA at a low?
Is it advisable to cash out the 401k into the IRA during this time ?
Yes -- sell it now, since we are at all-time highs and high fees are worse than low fees

Hold it for zero days and reinvest it immediately into cheaper funds, because todays price will be cheaper than the price in 10 years (hopefully)

Lastly, don't blame me if in the 1-2 days you're out of the market the indices go up by 10%, but do thank me if they drop and you reinvest at lower prices
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oldcomputerguy
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Re: Is it possible to time the market to invest ?

Post by oldcomputerguy »

You don't know for sure that a low is coming. Even if one was, how would you recognize the bottom of the drop?

Don't worry about timing the move. If you decide a move is right for you, do it. Don't try to "sell at the top" and "buy at the bottom". You don't know when either of those points will arrive.

For entertainment and some inspiration, read the story of Bob, the World's Worst Market Timer.
Topic Author
Aspiringbogle
Posts: 7
Joined: Tue Mar 27, 2018 8:47 am

Re: Is it possible to time the market to invest ?

Post by Aspiringbogle »

Thank you all. That helps. :happy
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grabiner
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Location: Columbia, MD

Re: Is it possible to time the market to invest ?

Post by grabiner »

Aspiringbogle wrote: Tue Jan 12, 2021 5:21 pm Now since the funds wont transfer as is to the IRA , I am bit skeptical about cashing out the funds that are doing good in the current 401k .
The advisor did say that they don't advise to time the market but left to my discretion .
What you would be doing is not timing the market. You can sell a US stock fund from the 401(k), and buy a US stock fund in the IRA. If the market rises, both funds will have similar gains. (And if you sell a high-expense stock fund to buy a lower-expense stock fund, you want to do that as soon as possible, since you will gain the benefit of the lower expenses.)
Wiki David Grabiner
Marseille07
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Joined: Fri Nov 06, 2020 1:41 pm

Re: Is it possible to time the market to invest ?

Post by Marseille07 »

Some form of simple TA is definitely possible, if not desirable even. SPX can be in a drawdown for a very long time and I don't see much wrong staying on the sidelines using TA.

Now, beating the market is a different matter altogether.
SnowBog
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Re: Is it possible to time the market to invest ?

Post by SnowBog »

I'd recommend only investing on days that end in "day". (That rules out tomorrow - at least until it becomes today). :beer
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