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When market drops....shifting funds?

Posted: Thu Jan 31, 2013 4:53 pm
by alewisdvm
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

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

Posted: Thu Jan 31, 2013 5:02 pm
by zebrafish
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.

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

Posted: Thu Jan 31, 2013 5:11 pm
by alewisdvm
I understand.
That is why I have always been long and use almost all vanguard funds.
Just a general inquiry because I was curious.

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

Posted: Thu Jan 31, 2013 5:27 pm
by leonard
Hypothetically and in theory - you should stay the course.

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

Posted: Thu Jan 31, 2013 5:56 pm
by pkcrafter
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

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

Posted: Thu Jan 31, 2013 6:04 pm
by nisiprius
alewisdvm wrote:So, of course, it is never smart to chase the market.
Stop right there.

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

Posted: Thu Jan 31, 2013 6:15 pm
by Ed 2
Here we go again.))) Thank you God for making us (bogleheads) a tiny minority of all the "smart"crowd :D :happy

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

Posted: Thu Jan 31, 2013 6:40 pm
by alewisdvm
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.

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

Posted: Thu Jan 31, 2013 10:44 pm
by zebrafish
We all get weak sometimes, my son.

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

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

Posted: Fri Feb 01, 2013 3:24 pm
by leonard
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?

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

Posted: Fri Feb 01, 2013 3:43 pm
by SC Hoosier
When the market drops, find all the money you can and buy! Then don't sell. :D

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

Posted: Fri Feb 01, 2013 3:59 pm
by jwa
When is the market going to drop? I need to know. :oops:

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

Posted: Fri Feb 01, 2013 5:48 pm
by minesweep
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